Why is Real Estate Better than the Stocks?


I get this question asked to me a lot. “Why would I invest in Real Estate, why wouldn’t I just leave my money in the Stock Market.”

I see a lot of these financial papers or financial write ups that show financial comparison of a stock performance or of a stock index performance as it relates to Real Estate or Real Estate indexes as well. One of the things they show is just an increase line. So for example a graph, they will show the price of the stock or that index from 20 years ago and then they show increase of that stock and maybe a leveling or an increase or whatever. Then they will show at the end here is where we started, here is where we are now and has risen

Then they will take the same Real Estate analysis and they will show the same thing. Maybe they will show Real Estate didn’t improve at the same rate of appreciation or the same increase as compared to the stock. When they are doing that all they are really showing or comparing si the price of the stock vs the price of the Real Estate or the price of the property. So if you bought the property for $300,000.00 and they are showing over 20 years that property is now worth $600,000.00 compared to the Stock where there’s a bunch of stocks that you bought worth $300.00 and now they are worth $700.00.

Now is the Right Time to Invest in Real Estate


Why is it the right time to Invest in Real Estate? This is Canada this is January 15th and the Bank of Canada just dropped their bank rates by 0.25% and its now sitting at .75%. What that means is that banks themselves could follow suit and adjust their own lending rates some are saying they are not going to do anything. Regardless, you have interest of less than 1%. Right now if you have good credit and you want to get a mortgage you can get mortgages in the range of 2.5% its ridiculous how low interest rates are right now.

So one of the reasons now is a good time to Invest in Real Estate is because the interest is at all-time low and you want to take advantage of that. Because interest rates are at an all-time low, when you are collecting rent, and paying expenses your mortgage is that much less than when you were getting at 3%.

So if you’re collecting the same rent the difference in the two is phenomenal. The second reason is because house prices are at an all-time low as well. The reason that houses are low is because people can’t qualify for mortgages as easily. I know that sounds strange because the interest rates are much lower but there is still a qualifying rate.