Every choice we make can have a big or small impact on our lives. From choosing a career path, choosing a home, finding a partner, and raising a family–all of these life milestones start with a decision.

For many, the goal is to make good decisions that will help grow your wealth, allow you to provide for your family, and eventually retire comfortably. This is where investing comes in.

Now, we aren’t financial advisors, so we can’t say with certainty what type of investment strategy is best for your unique situation. However, one of the most frequent questions we get from real estate investors is whether or not their money would be better invested in stocks vs. luxury real estate.

As a top Park City real estate team, you can imagine we have some thoughts! However, we’re real estate experts, not financial advisors. For any financial advice specific to your unique situation and goals, make sure you speak to a professional.

With that said, here is what you need to know about investing in luxury real estate vs. stocks.

Are you looking for luxury properties in Park City? Read more about why luxury condos are a great investment here.

You Can’t Live in Your Stocks

This might be an obvious point, but it’s a good one nonetheless. Stocks and real estate are vastly different products. Real estate is tangible, whereas stocks, for the most part, are more of a concept.

You can’t touch your stocks, and you certainly can’t live in them the way you would a home. If you’re the type of person who prefers having something physical in your hands, you might prefer real estate investing.

Not to mention the practicality of it. Owning real estate is like killing two birds with one stone. On the one hand, it provides security and shelter, but on the other hand, as you pay down your mortgage, you build equity and as the value of your home appreciates, you’re building long-term wealth.

Looking for more real estate investing tips? Here are a few more blogs about investing in Park City:

• Is Park City Good for Real Estate Investors? 
• Everything You Need to Know About Hiring a Property Manager in Park City
• What to Know About Investing in a Park City Vacation Home

Real Estate is a Good Way to Hedge Against Inflation

A big part of any long-term investing strategy is to understand the economic factors that can influence your return. Inflation and ongoing price increases over the years tend to reduce purchasing power.

For example, the loaf of bread that was 30 cents way back in the day is now $3-4. That price increase comes from inflation. Savvy investors seek investment options that can act as a “hedge” against inflation.

This means the value of the asset appreciates with the rate of inflation. Historically, real estate has been an excellent option for investors looking for a lower-risk asset that offers some protection against inflation.

Although stocks can sometimes rise with inflation, it’s nowhere near as stable or predictable as real estate. In general, real estate is considered to be less risky and less volatile over a 10-year period than typical stocks.

This is why real estate is often considered to be a better long-term investment strategy.

You Get More Tax Deductions with Real Estate

Owning an investment property is similar to owning a business, and as such, you can write off certain expenses pertaining to the property.

For example, when you have an investment property, you can write off interest on the mortgage, property taxes and fees, repairs, utilities, and beyond. Stocks do not offer such tax benefits.

Learn more about the tax implications of owning a vacation home right here.

Real Estate is Fun!

Although buying a home can sometimes feel a little overwhelming, there’s no doubt that the feeling of closing on a property is exhilarating. It feels like a fresh page ready for you to write a new story. Everything is ahead of you and you’re embarking on an exciting journey!

The process of buying real estate can also be fun. Going to showings, browsing listings online, and attending open houses only help you visualize your future.

When it comes to stocks, the thrills are minimal at best. Managing your stock portfolio is as mundane as signing into an online account or placing a call to your stock broker. What’s more exciting: getting a paper statement in the mail or getting keys to a new home?

Park City is a premier destination for recreation in Utah. This makes it even more appealing for investors! Learn more about what makes Park City so special with these posts next:

• Why Park City is the Best Home Base for Recreating in Utah
• Things You Didn’t Know About Living in Park City and Deer Valley
• Why Park City is the Best Mountain Town to Live In

Real Estate is More Creative

In Park City, many real estate investors also use their properties as secondary vacation homes, which means they reap the benefits of being a homeowner and an investor. You can use your property for family and business. It means more ski vacations, more family time, and more relaxation all while you’re growing wealth and safeguarding the future.

We’re real estate experts, not tax advisors! For detailed advice and information regarding the tax implications of owning a second property, make sure you speak to financial advisor or CPA. 

Do You Want to Invest In Park City Real Estate?

As a tourist town with incredible amenities and activities, the investment opportunities in Park City are endless. If you’re thinking about investing in Park City vacation home, we’d love to show you around!

At CMFH, we’ve lived, worked, and played in Park City for more than 30 years. We know the area and the market like the back of our hands and can guide you to making wise decisions that will benefit you now and in the future.

Get in touch with us directly by calling 435-647-8035 or emailing info@cmfhparkcity.com today.