Comparison: investments in loans secured by real estate vs. investments in stocks

(This article is NOT investment advice).

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Stock markets are sometimes considered synonymous with investing. But Czech investors are showing that their finances often prefer to evaluate in opportunities that are less risky, and yet yields above average yield. As, for example, in loans secured by real estate that can be invested in on Investown.

Investing in loans secured by real estate works on the principle of crowdfunding. Hundreds of investors, through Investown, are putting their finances into a real estate project by a developer who borrows money from them through this route. Investors receive a fixed interest rate of up to 10.5 per cent per annum for remuneration. You can find out more about fixed income investments in of this article.

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Loans backed by real estate vs. equities

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Loans secured by real estate: high yield with minimal risk

Investing in real estate loans is still a novelty compared to stocks, but it has quickly taken hold in the Czech Republic and other countries around the world.

Offers investors high yield (on Investown, it's up 10.5%) at minimum level of risk. Evaluation is at the same time fixed, so the investor knows from the beginning how much money a given investment will bring him. This is a big difference from stocks where the outcome is uncertain from start to finish.

Among the big advantages are simplicity and speed. The investor gets out of investment offers selects a real estate project, invests in it, and does not care about anything else. Everything else is done for him by the investment platform. Thanks to this, the appreciation of finances in real estate loans suitable even for those who have never been interested in investing before.

Did you know that investment projects on Investown have a high success rate? Among other things, because minimizing investor risks is a top priority for us.

In addition, when an investor chooses a trusted platform, his money is maximally safe. Investown, for example, provides for all investment offers bank level of investment security. Even if the owner of the real estate project stops repaying, we have the option of recovering the money back. We will always do our best to get you back all of your investment, or at least part of it.

In addition, it is possible to invest in real estate loans on Investown from 500 CZK.

Investing in real estate loans is still a novelty compared to stocks, but it has quickly taken hold.

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Stocks: high risk and the need for investment knowledge

Investing in individual stocks is especially popular with more advanced investors who like to spend time analyzing specific companies.

In the long run, stock returns vary on average between 8-12% and may exceed 20% in certain periods, but only at the price High risk. Theirs Valuation fluctuates depending on the current situation in the markets and the economy and also according to how they are doing at the moment. This is why stocks are often loss-making.

Thus, a potentially high yield is redeemed by uncertainty and it is necessary to have a long investment horizon set, ideally of 5 years or more. This is not an ideal choice for someone who will need the money invested in the near future

If an investor wants to be successful when investing in shares of publicly traded companies, he must invest at least partially understand and devote hours of time to it. Therefore, this type of investment is not suitable for beginners.

Platforms (brokers) that offer to invest in stocks often charge fees for brokering an investment, for currency transfer and other services. Therefore, it is advisable to calculate at the beginning whether the appreciation of money in shares pays off even under these conditions.

The advantage, on the other hand, is that when investing in certain stocks, the investor can receive a dividend, that is, a regular reward for holding the shares of a given company. Equally, stocks make sense for investors, who want to invest actively, for example, because they enjoy this activity.

An alternative to classic stock investing is buying ETFs, which include tens to hundreds of shares of companies. However, investing in ETFs is also high-risk.

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Final Summary

While investing in loans secured by real estate is suitable for most investors (primarily those preference for fixed valuation and minimal risk), the shares of individual firms will be valued primarily by more experienced investors who are willing to take a high risk of loss.

In the case of loans secured by real estate, investors does not have to pay any fees and after investing in a real estate project, they do not have to devote the investment no extra time or effort.

The advantages of some stocks include the fact that they pay dividends to their investors on a regular basis.

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This article is not investment advice

Investown does not provide investment advice. This is an educational article with basic information about shares and credit secured real estate. For specific advice, we recommend using the services of an investment advisor.

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