Stocks or Real Estate: Which Offers a Better Return?

By Monique Walker

Monique Walker has 21 years of experience successfully buying and selling homes in the Phoenix market. She knows the neighborhoods, schools, and the local economy. Monique and her team do all the leg work, keeping you up-to-date with new listings and conditions as they impact the market.

When it comes to investing, many people wonder whether stocks or real estate offer a better return. While both have their advantages, understanding the potential returns of each can help guide your decision-making process. Here’s a simple breakdown of both options using a hypothetical $20,000 investment.

Let’s say you decide to invest your $20,000 in Amazon stock. If the stock goes up by 10% over a year, you would earn $2,000. While this is a solid return on investment, it’s a relatively modest increase compared to other options.

Now, consider investing that same $20,000 in real estate. With a 5% down payment, this would secure a $400,000 home. If the value of the home rises by 10%, the return is $40,000. This means your original $20,000 investment has now doubled, giving you a $40,000 gain.

In this example, a 10% increase in stock values brings a $2,000 return, while the same 10% increase in real estate results in a much larger return of $40,000. This demonstrates how real estate can be a powerful tool for leveraging and accumulating wealth, thanks to its potential for higher returns.

Real estate can be a powerful way to grow your wealth. With a small down payment, your return can be much higher compared to stocks, especially when the market is in your favor. As you plan for the future, consider how real estate can help you achieve your financial goals. If you have any questions or need further guidance, don’t hesitate to reach out. You can call me at 703-405-5119 or send an email to sue@richeypm.com. I look forward to hearing from you.