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Real Estate or Stocks, What's the Better Investment?

Investing is a Highly Personal Choice

If you want to turn your money into more money, you may be wondering if you should invest in real estate or stocks. While both have the potential to help grow your wealth, there’s just no way to predict the future and provide you with a black and white answer.

Both real estate and stocks come with their own risks and advantages. A lot depends on your financial situation, long and short-term goals, investment preferences and risk tolerance.

Real estate is a tangible asset but not as liquid as stocks.

Stocks are highly volatile, but you can get started with minimal investment.

Even your life stage may be another driving factor in your decision on where to invest. 

If you’re younger, you may be more risk-tolerant and excited about the prospect of “betting” on stocks without investing a ton of cash. If you can swing the purchase of rental property, you’ll likely have the energy to take on the work of owning and managing. 

For those in a later life stage, there’s often a desire to put down roots. Your focus might be to simply own a primary residence where you can settle down and raise a family—while your asset appreciates over time. All you do is keep up on home maintenance.

As you can see, it’s entirely up to you and what you want. To further help you make a decision, review the pros and cons of each investment opportunity below. 

Should You Invest in Real Estate?


  • Pretty straightforward—buy now, hopefully sell for more later
  • You are in charge of where you buy, what you buy, how you take care of your asset
  • Pride of ownership in a physical tangible asset that can be passed to family members
  • Only requires 20% down and current interest rates are at all-time lows
  • You can also potentially deduct mortgage interest on your taxes
  • Real estate values and rental income typically increase with inflation
  • Long-term and reliable passive income if you purchase a rental property 
  • Tightened lending regulations are in place to prevent another crash like 2008
  • Sell and avoid capital gains tax, up to $250k if filing single or $500k for married, filing jointly
  • You can take out home insurance to protect against physical damage
  • In a strong market like Colorado, appreciation has been consistent—currently significant


  • Requires research and/or help from an expert to purchase a solid investment
  • Typically requires a substantial down payment
  • Difficult to diversify in multiple properties unless you have a lot of money to invest
  • Currently increased prices due to high demand, low inventory, and low interest rates
  • Not easily liquidated if cash is needed or you need to move long distance
  • Returns can be affected by economic downturns or recessions
  • Buying a home requires ongoing maintenance and updates
  • If purchasing a rental property, you’ll need to manage renters and the property

Should You Invest in Stocks?


  • Anyone can get started with minimal money invested
  • Investment in stocks through a 401k can be matched by employers if offered
  • Direct investments can easily be quickly liquidated when cash is needed
  • Typically need to diversify to protect from losses, but it’s easy to do so
  • You’re not tied down to a single, physical asset
  • Low transaction fees


  • Stocks are an intangible asset
  • Gains made in your 401k are not easily accessible, if at all
  • You are not in charge of the businesses you invest in and have no control
  • More volatile than real estate with no guarantee that you’ll make any money
  • Returns can be affected by economic downturns, recessions, inflation
  • Cannot take out any insurance to protect against crashes or loss
  • Selling off stocks can lead to significant capital gains taxes
  • Must be emotionally prepared to ride out the ups and downs
  • Requires studying and researching stocks or handing over control to a professional

If you would like to speak with a PorchLight agent about growing your wealth in the local real estate market, please don’t hesitate to get in touch. We’d love to answer any questions you might have and assist you with making the right decision for your needs and goals.

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