Is investing in real estate safer than the stock market?

June 9, 2020

The stock market took another plunge last week as COVID-19 and social unrest continue to grip the nation.

The volatility of financial markets is pushing more Americans to invest in real estate. The property market is holding steady amid the turbulence and massive unemployment.

Universal Studios has re-opened, and Disney World plans to re-open next in July, signaling that workers in the tourism and service industries works are returning to their jobs here in Central Florida.

But the pandemic hasn’t gone away, and economic predictions vary widely as many businesses, large and small, try to recover from the downturn and build resilience. We’re all a little afraid of the possibility of another round of closures and quarantining.

The uncertainty of it all is perhaps why real estate is more appealing to us these days.

A new survey from Gallup shows that 35% of Americans say real estate is the most favored long-term investment, which has been the case since 2013. Over one-third of Americans have named real estate as the top investment since 2016.

Here’s a quick look at the pros and cons of investing in real estate and the stock market.



-The investment is straightforward. There are two basic types of real estate: residential and commercial. Owning a tangible asset can make you feel more in control of your investment than buying slices of ownership in companies through shares of stocks. And while the home buying/selling journey can be complicated, the general idea is that you buy a property, maintain it and sell it at a higher value.

Investing with debt is safer with real estate through a mortgage. Investing with debt via the stock market is known as “margin trading” and typically only done by experienced traders.

-Owning real estate is generally considered a hedge against inflation.

Tax advantages abound, such as the mortgage interest deduction.


-Maintaining properties is work. It’s not an investment that you make then put aside.

Transaction costs typically are higher in real estate than they are in the stock market.

-Real estate returns are not guaranteed. There’s always a risk of selling a property at a loss. Remember 2008?




-Stocks are highly liquid. Unlike real estate, it’s easier to know the value of your investment at any given time.

-Diversifying stocks is easier than real estate. It’s hard to buy enough real estate in enough locations and in varying industries to diversify like you can with stock investment portfolios.


-Stock prices are more likely to change rapidly than real estate prices.

-Selling stock can cost you capital gains tax.

-There’s greater potential for emotional decision-making with stocks. Investors sometimes sell when a buy-and-hold strategy will typically produce greater returns.