Should You Invest in the Stock Market or Commercial Real Estate?

Commercial Real Estate

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Let us discuss money…

Making money is one thing but keeping and growing it is quite a challenge. Billions of dollars are spent by financial institutions to persuade you to spend and invest in a certain manner. While lot of them are dubious, some of them offer fantastic advice and offer a futuristic approach on investments.

So then how do you invest? That is a big question, and there is no general response to it. Your age, income, risk tolerance, goals and aspirations would all need to be taken into consideration to answer that question.

In this article let us focus on the stock market and real estate – the two most popular investment sectors.

Commercial real estate vs. stocks: Pros and Cons

Stocks and real estate investment commercial  both have an element of risk. Risk tolerance level is one of the main criteria in making individual investment decisions.

If you have invested in equity before or planning to do it now, you need to know that equity investing in all asset classes come with a level of risk. The risk would be greater in stock market investing and considerably less in real estate. Risk could be lessened by several things, like expertise, research, mentorship, and patience. In any case there will be some level of risk that you will need to live with if you want to grow your money.

Pros of Stock Investing:

  • Leverage comes with elevated risk
  • Passive Income (Dividend Stocks only)
  • Tax Benefits (Only in case of actual loss)
  • Easy to Buy & Sell (very liquid)
  • Windfall gains

Pros of Commercial Real Estate Investing:

  • Leverage at an exceptionally low risk level
  • Passive Income (Rentals)
  • Depreciation & Other Tax Benefits
  • Stable Appreciation
  • Physical Assets

Commercial Real Estate Is Real

Unlike stocks, investing in commercial real estate has tangible value. Value is in the land, property improvements such as the building and infrastructure, in addition to the income and cash flow it generates. Best of all is that even as your commercial property appreciates in value, you can save on taxes by claiming depreciation.

You have valuable assets to fall back on even in the worst-case scenario where your income drops to zero because the tenant has either broken their lease or moved out, protecting your downside. Stability is tangibility go hand in hand.

Commercial real estate is a stable investment, as it provides housing (apartment buildings and mobile home parks), enables commerce (retail or office space), helps with manufacturing and storage (industrial warehouses). For these reasons commercial investment in real estate is less prone to wild swings like the stock market. In our opinion nothing compares to real estate in terms of overall returns in the short and long term.

Commercial real estate invest – immediate monthly income and cash flow, ongoing tax benefits, and wealth creation over time.

How to Diversify Your Investments in Commercial Real Estate

Okay, if we are on the same page that commercial real estate investments are a much more stable than stocks, let us go over some real estate asset classes for diversification of your investment portfolio. As a commercial real estate investor, you could diversify your investments in the following real estate asset classes:

  • Multifamily
  • Office
  • Industrial
  • Retail
  • Hospitality

Unlike single family homes where your risk is much higher, commercial real estate offers income, tax benefits, appreciation, and diversification. That, in our opinion, is the essence of long-term investing. Visit for more information regarding the best way to invest in commercial real estate.

Even though real estate investing may not be as simple and as liquid as pressing a few buttons on a computer to enter the stock market buy & sell orders; collaborating with the proper operator/sponsor/developer could make commercial real estate investing incredibly simple, passive, all while generating consistent returns.

So, what do you think about investing in commercial real estate?

Disclaimer: This is in no way an investment advice or solicitation. Please consult your CPA or an investment professional before making any investment decisions.

By joining our private investor network, you are only indicating an interest to invest in certain real estate opportunities, and are not legally bound to purchase any securities, nor are any securities yet being offered to you.

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