Outperforming the Market

Real Estate Investing Outperforming the Stock Market

Outperforming the Market

Real Estate Investing Outperforming the Stock Market

Recent news headlines grabbed investor’s attention lately giving evidence as to the benefit of real estate investment over stocks. According to Master Multifamily, residential and diversified real estate investments outperformed the S&P 20-year average return. This news is encouraging for investors who prefer to actually have something tangible for their investment dollar, rather than nervously watch the ups and downs of the stock market. 

Take a look at these numbers as evidence to the benefit of real estate investment over stocks.

Real Estate Investing vs. Stock Market Investing. A 20 Year Review of Returns.


  •  S&P 500 Index’s average return 8.6%  (approximation)
  • Commercial Real Estate average return 9.5%
  • Residential and Diversified Real Estate average return 10.6%
  • Real Estate Investment Trusts (REITS) average return 11.8%

The data tells us that the real estate sector outperformed the overall market, even during the collapse in housing prices, amid the 2008 financial crisis.

Why Investors Feel Real Estate Is Better Than Stocks:

  • Control:  The wealth-building choices are all up to you. You decide whether you want to be “hands on” or delegate management to professionals.  You decide where and how to invest and whether to make asset improvements or cut costs. 
  • Leverage Other People’s Money:  Because bank funds are used for about three-fourths of the investment, price appreciation is magnified. You can earn a return on your own investment, along with a cash flow margin, on the debt-financed part of the investment.  Your renters will pay down or pay off the debt for you.  The value of debt declines, due to inflation, while the asset appreciates over time.  You end up paying off the liability with cheaper dollars.


  • Tax Advantages: We are not tax experts, but found this article interesting. According to Master Multifamily,  with proper planning, you can deduct all operating costs, interest paid to banks, and some otherwise “personal” expenses. 


They go on to say: “You can deduct a non-cash item called depreciation of the entire investment.  This depreciation benefit may be accelerated by segregating the costs of the investment into components.  And, through a Section 1031 exchange, you can indefinitely defer tax on the sale of your investments.  Cash you received from the investment, during the operating period, will most likely be shielded from taxation.  When you sell the investment, if an exchange is not used, you will pay taxes at a more favorable capital gains rate.  Real estate professionals also offset income with real estate losses each year.  Should you decide to refinance the property, you may receive cash from the investment, without getting a tax bill.”

    • An Asset You Can Touch:  You can see, touch, improve and evaluate a real estate investment.  Your title rights can be insured.  Real estate is difficult to steal, due to the legal environment. Real estate is a limited quantity, and there are barriers to entry.
  • Control the Investing Market Place:  With real estate, you choose the most favorable markets and specific properties available in the marketplace.  You can evaluate the risks and rewards, rather than allow someone else that choice, on your behalf.
  • Lack of Volatility in Single-Family Homes: According to Roofstock, Investors who add real estate to their portfolios reduce their exposure to risk.  Specifically, single-family rentals are an asset class that has proven to be less volatile than stocks and bonds, and they have generated a consistent income each month, “largely uncorrelated to the equity market.” 


How APIA is Helping Real Estate Investors with Five or More Single-Family Homes:  Investors who own five or more single-family homes know that the first step is to provide insurance coverage to protect their investments. Asset Protection Insurance Associates (APIA) can make that process easy by placing all properties under ONE POLICY.  Call us at 877-752-2742 or visit www.APIAprotects.com to get a quick quote. 

APIA Specializes In Real Estate Investor Insurance

Multiple policies can be a lot to track, APIA built programs to put all your properties under ONE insurance policy. We’ve been helping investors save time and improve cash flow nationwide since 2001. 

Did you find this article, Real Estate Investing Outperforming the Stock Market, interesting? Check out our other blog posts.

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