You can't just say one is better than the other. Real estate takes actual work vs. investing in a broad basket of stocks via ETFs.
With real estate you get leverage that you just can't get with stocks. The gross return of real estate is less than stocks but you have to factor in leverage. For example, I just sold two apartments for $500k. I paid $435k. My equity in this was only $87k. The apartments only went up by 15% but my profit was $150k--nearly double my investment due to the leverage.
Sounds easy right? No, you really have to know your market. What are the demographics? Is there immigration/intramigration? What construction is taking place in the area that will lead to an increase in value over time (e.g., new transportation systems, colleges/education, retail stores, etc.).
The other issue is cash flow. In my area it is virtually impossible to find cash flow positive investments. I have a very intricate spreadsheet that lets me model changes in interest rates, rent, etc., to make sure I'm close to cash flow neutral (i.e., the tenant pays all my mortgage, tax, condo fees/HOA, utility expenses) while I benefit in the appreciation of the units over time. You don't want to be losing $200-$300 a month on your units.
So if you're prepared to do the work and find opportunities then real estate is definitely a worthwhile endeavor. Stocks are more laid back. I do both!
With real estate you get leverage that you just can't get with stocks. The gross return of real estate is less than stocks but you have to factor in leverage. For example, I just sold two apartments for $500k. I paid $435k. My equity in this was only $87k. The apartments only went up by 15% but my profit was $150k--nearly double my investment due to the leverage.
Sounds easy right? No, you really have to know your market. What are the demographics? Is there immigration/intramigration? What construction is taking place in the area that will lead to an increase in value over time (e.g., new transportation systems, colleges/education, retail stores, etc.).
The other issue is cash flow. In my area it is virtually impossible to find cash flow positive investments. I have a very intricate spreadsheet that lets me model changes in interest rates, rent, etc., to make sure I'm close to cash flow neutral (i.e., the tenant pays all my mortgage, tax, condo fees/HOA, utility expenses) while I benefit in the appreciation of the units over time. You don't want to be losing $200-$300 a month on your units.
So if you're prepared to do the work and find opportunities then real estate is definitely a worthwhile endeavor. Stocks are more laid back. I do both!