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  • Writer's pictureShannan Small

Why Is Real Estate Investing More Reliable Than Stocks or Cryptocurrency?

Investing your money is one of the most beneficial ways to increase your wealth, save up for retirement, or dedicate funds to certain life goals, such as a savings account. Charlotte, NC is one of the most active markets for real estate investing since the city is experiencing a boom from millennials who want to invest in long-term properties. However, with cryptocurrency also on the rise, is investing in real estate more reliable?

Why Real Estate Investments Are More Reliable Than Stocks or Cryptocurrency

Although cryptocurrency is growing in popularity and many people are choosing to invest their money into this new financial stream, it still stands that real estate is more reliable for investing in the long term. Cryptocurrency may be gaining ground, but this investment method is also speculative, unpredictable, and high risk.

Stocks and Cryptocurrency Are Speculative

The advantage and the fatal flaw of cryptocurrency is the fact that crypto is speculative, which means that it doesn't have much stability. Because cryptocurrency is still establishing the value between trades, it has a speculative value that is very unstable. If you are investing money to build your financial portfolio, using cryptocurrency as your primary investment tool is not wise. In the same way, stocks can also be speculative.

Real estate investments, on the other hand, have a hard physical value that can be measured, appreciated, and transformed. Because real estate relies on the value of the land and the property, there is no speculation about how much the investment is worth.

Stocks and Cryptocurrency Are Unpredictable

Like the stock market, cryptocurrency is highly unpredictable. The value of money invested in cryptocurrency can change day-to-day, particularly in volatile market conditions where the value of cryptocurrency changes by the hour. Although cryptocurrency is available for everyone to invest in, the structure of crypto is even less predictable than the general stock market, which is vulnerable to the whims of hedge funds.

Stocks and Cryptocurrency Are High Risk

Finally, cryptocurrency and stocks are high risks. The unpredictable value of crypto can make it very easy to lose your entire portfolio if you have not invested with caution. Similarly, a high-risk stock investment that goes south can be the cause of financial ruin, including bankruptcy in extreme cases. By contrast, real estate is relatively low risk. Because a property will always hold intrinsic value, real estate is a lower-risk investment that pays off over time.

Why Should You Invest In Real Estate in Charlotte, NC?

In recent years, there has been a boom in the housing market among those who are investing in real estate property. In North Carolina, cities such as Charlotte and Raleigh have seen a sharp rise in real estate investment. Here are a few reasons why it may be a good idea to invest in real estate in North Carolina.

Real Estate Is a Hedge for Inflation

Real estate functions as a hedge for inflation. This essentially means real estate is not subject to the same whims of inflation as other types of investments. For example, real estate has a hard intrinsic value, so it is generally unmoved by any major fluctuations in inflation. As part of the bigger picture, because real estate hedges inflation, it helps the economy become more stable.

Real Estate Has Above-Market Returns

Real estate also has above-market returns. Above-market returns are essential for those who invest in real estate and want to increase their return on investment. The real estate market allows for the negotiation of prices between buyers and sellers, so sellers can negotiate for above-market returns on properties that have grown in value.

Because real estate has above-market returns, and because real estate properties are more limited than investments, taking advantage of these negotiation tactics can generate more returns on profits for your portfolio.

Real Estate Is Consistent Passive Income

Real estate is also consistent passive income, which can be a smart investment for those who want to create financial stability. Because renting out real estate property and becoming a landlord will generate a set monthly income, the consistency of this income can make it easier to maintain a steady cash flow. In the long run, this is a reliable way to build equity and flesh out your investment portfolio.

Real Estate Has More Tax Advantages

Finally, real estate investments have significant tax advantages, which can help investors save on taxes each year. For example, real estate investors have financial perks such as property insurance, mortgage interest, property taxes, and cost of maintenance, all of which are deductibles on tax returns. Investors who sell a property for profit can also explore the benefits of short-term and long-term capital gains.

Although cryptocurrency and stocks can be exciting investment opportunities, at the end of the day, real estate investments are still more reliable in the long run. Real estate is low-risk and more predictable, allows for consistent passive income, hedges inflation, and has more tax advantages. To learn more about real estate investing in Charlotte, NC, get in touch with Better Path today.

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