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Investing in Mutual Funds vs Real Estate

When you have money you want to put to good use, you may be tempted  by any number of investment options. Two popular options that often come to mind include mutual funds and real estate. But which one truly comes out on top and why? Today, we will explore that.

What Are Mutual Funds?

Mutual funds pool money together with other investors. Supplemented with a portfolio, you receive a group of stocks, bonds, or additional securities in exchange for your money. 

The value of the portfolio’s assets divided by the amount of shares is what determines the pricing of mutual funds called the NAV, or net asset value. However, know that the investor doesn’t actually own the assets themselves—only the shares.

Also note that each mutual funds investment carries their own goal, portfolio and risks. Fees can potentially arise and cause a reduction of returns which might make mutual funds not a great option for you.

What About Real Estate?

On the other hand, real estate is another way to invest your money. Real estate investing is the process of buying, owning, leasing, or selling properties (land or buildings) for profit. 

Real estate usually falls into four distinct categories:

  • Residential: homes
  • Commercial: businesses
  • Industrial: warehouses, factories
  • Land: farming, ranches

Investing in real estate can take on many different forms. Maybe you choose to invest in properties directly and rent out units. Maybe you are just looking to diversify your portfolio and would prefer to take a more indirect approach to real estate.

No matter your needs or preferences, real estate can accommodate. 

Real Estate: The Better Investment Option?

Investing can be a risky business. Obviously, you want to be ensured when putting your money out there. 

Making up 60% of the world’s wealth and assets, real estate investing has previously proven itself to be a sound way to invest your money.

There are many benefits of investing in real estate, including:

  • Leverage, or the borrowing of capital to increase the potential profit, allows you to invest when you cannot buy the property yourself. 
  • Your investment in real estate provides ways to save on taxes, too. Your profits can be listed as capital gains with lower tax rates, and overtime, lower the tax basis with depreciation of your properties.
  • Finally, you’ll have more control over your real estate investments than you would with mutual funds. Instead of waiting for a profit of a stock, you are the person in  charge of prices, improvements of the property, and other forms of revenue at all times. 

Bottom line: real estate comes out on top as an investment option that is always relevant, accessible, and meaningful. While you cannot always predict what a market will look like, you can rest easy knowing that your assets are physical with evident value, unlike mutual funds, which can fluctuate wildly.

    

 

 

 

 

About North Lakes Investments

North Lakes Investments is a real estate investment company with a longstanding presence in the Greater Toronto Area (GTA) and Durham region. Our mission is twofold: to contribute to the housing supply by constructing energy-efficient homes and to provide quality housing for exceptional tenants. Simultaneously, we aim to deliver an above-average return on investment (R.O.I) for both our joint venture partners and ourselves. This approach creates a truly win-win-win scenario for investors.

North Lakes Investments offers its investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact North Lakes Investments.

For more information about North Lakes Investments and its investment program, please call 1-905-233-2607 or email them at invest@northlakesinvestments.ca or visit https://northlakesinvestments.ca/

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