Presale Investing VS Stocks? Which One Is Better In 2022?
Presale Investing VS Stocks. Which one is better and which offers better returns. In the following blog we break down both investments.
What is Presale- Real Estate Investing?
Starting in the real estate market doesn’t mean you have to get the typical “investor starter” property or even be stuck with a single property. You can build an investment portfolio that has presale condo properties to suit your needs and circumstances.
Investing in pre-construction condominiums is one of the surest ways to grow your money. The average cost for a condo is around $400,000 and you can expect a 5-10% increase in price per year.And that’s what makes pre construction investing so special — you’ll be able to enjoy your profit from the lifestyle of living in a condo before it’s even built..
Presale Investing Vs Stocks
Presale investing is different from stock investing. When you invest in stocks, your money goes to large corporations that are only interested in a short-term return on their investment. Presales are different, where there is little-to-no overhead and no trading fees; this will make all the difference on your portfolio.
As a real estate investor, you might feel that having control of your own investments is important. Pre-construction condos provide you with the opportunities to make important decisions in the design, décor and building process. This can provide you with both a good monthly income and an additional payoff after completion.
When you invest in stocks, mutual funds or even REITs, you have to pay fees for management and get dividends from the company before you can collect your profits. When you buy a pre-construction condo, your money is on deposit with the developer. They will use it to finance the construction and deliver the project on time. Once it is built, the developer gives you a warranty deed, so now you own a mortgage-free condo.
Like other pre-construction investment options, building a condo is a long and tedious process. You see your money tied up for years from start to finish. Because of that, it’s important that you don’t make some obvious mistakes during the the pre-construction phase.
9 Benefits of Buying Presale Real Estate Over Buying Stocks
1. Real Estate is Easier to Analyze & Quantify
The basics of real estate investing are simple. You buy a property, manage its upkeep, and attempt to resell with a higher value. However, buying any sort of asset whether it’s presale condo or a resale house, real estate always makes you feel more in control than buying slivers of ownership in company stock through an investment brokerage account.
2. Investing with Debt is Safer in Real Estate & Quantify
Investing with debt is safer with real estate. When you buy a stock with debt, also known as margin trading(it’s not like when you bought your car with a loan), it can be risky for beginners. The other thing is that stocks are far more volatile than real estate, meaning that the price of the stock can go up and down dramatically at a rapid pace which makes it easier to see profits or losses.
3. Tax Advantage in Real Estate Ownership& Quantify
Investing with debt is safer with real estate. When you buy a stock with debt, also known as margin trading(it’s not like when you bought your car with a loan), it can be risky for beginners. The other thing is that stocks are far more volatile than real estate, meaning that the price of the stock can go up and down dramatically at a rapid pace which makes it easier to see profits or losses.
4. Tax Advantage in Real Estate Ownership& Quantify
One of the biggest financial perks of this income stream is the real estate investment tax deductions you’re able to take. You get to deduct expenses directly tied to the operation, management and maintenance of the property, such as:
- Property taxes
- Property insurance
- Mortgage interest
- Property management fees
- Cost to maintain and repair the building
5. Cash Flow
Real estate investing can be a profitable way to make more money in a short period of time. If you pick a right presale project with the help of a seasoned real estate expert like Ravi Bhindi, your real estate can definitely be cashflow positive after completion.
6. Long Term Security
Homes whether presale or resale are an excellent long-term investment because they are more than what they appear. Even if you’re not planning to make a profit off the sale of your presale condo in form of an assignment , there can still be plenty of opportunities available to you. For example, you can rent out an extra bedroom and use the income to pay for utilities and other household expenses
7. Control
After completion of a presale property, you have full control on what you would be doing with your real estate purchase. You are your own boss and you can have a direct impact on the outcome of your investment whereas in stocks or other investment that might not always be the case. You can also actively participate in bringing the value of the presale property after it’s completed by enhancing the interiors of the property and other modifications that can help with the value
8. Owning Real Estate Gives You a Sense of Pride
Owning a piece of real estate can be extremely rewarding. It won’t just add to your wealth, but you can also enjoy the sense of ownership and accomplishment that comes with owning a piece of real estate
9. Your Presale Property is Insurable & comes with warranty
As investments, real estate and stocks are both vulnerable to risks that can cause you to suffer a capital loss. However, real estate can be insured against the elements that can damage its physical value.
There are different types of insurance policies at different levels of coverage, and depending on your needs, you may want to consider more than one policy. Not only that, a lot of presale condo projects come up with extended warranty after completion.
Final Thoughts
If you’re looking to invest in stocks, a fair amount of knowledge and time is needed to make sure you make money from it. That’s why a lot of people prefer to do it through stockbrokers who do the research and stock picking for them.
Whereas, real estate always goes through cycles and even if you catch a bad timing while buying a presale property, it is a matter of time that it will be back on it’s feet as the economy progresses.
Without the right information, it’s easy to make a wrong decision when buying property. Here’s some help. Contact Ravi Bhindi, at 604-825-8881 so you can make an informed presale decision
