Real Estate vs. Stocks: Where Should You Invest Your $100,000 in 2025?

Investing is all about making your money work for you, but the big question is: Where should you put it? If you had $100,000 to invest in 2025, would you choose real estate or the stock market?

To make this comparison practical, let’s fast forward to 2035 and see how a $100,000 investment in both real estate and stocks might perform based on historical trends, investment strategies, and key advantages.

The $100,000 Investment Showdown: Real Estate vs. Stocks

Imagine you had two friends: Alex and Jordan.

• Alex invests $100,000 in real estate—a single-family rental home in a growing market.
• Jordan puts $100,000 into a diversified stock portfolio.

By 2035, their investments could look very different. Let’s break it down:

1. Tangible Asset vs. Paper Asset

Real Estate: Alex owns a physical property—something tangible that provides utility, rental income, and potential appreciation. It’s an asset he can touch, improve, and leverage.

Stocks: Jordan’s stock portfolio exists digitally. While stocks offer liquidity (the ability to sell quickly), they don’t provide the same control over value as a property does. Stocks are at the mercy of market sentiment, company performance, and economic factors.

2. Volatility & Risk

Real Estate: Housing markets move much slower than stocks. Prices typically don’t experience wild daily swings, making real estate a more stable investment. However, market crashes (like 2008) can occur, impacting home values.

Stocks: The stock market is far more volatile. A great year could see 20%+ returns, while a bad year (like 2022) could erase 30% of a portfolio’s value. Stocks react to economic downturns, interest rate changes, and geopolitical events more quickly than real estate.

3. Leveraging Investment vs. Stock Strategies

One of the biggest advantages of real estate is leverage.

Alex (Real Estate): Instead of putting all $100,000 into one property, Alex gets a mortgage. He uses the $100,000 as a down payment on a $400,000 property (assuming 25% down). Over time, rental income covers mortgage payments, and the property appreciates.

If the home appreciates at 4% annually, in 2035, it could be worth $592,000. Alex has only invested $100,000 out-of-pocket but has gained nearly $192,000 in equity—plus rental income.

Jordan (Stocks): With stocks, Jordan doesn’t get leverage (unless using risky margin trading). If the stock market averages 8% annual growth, Jordan’s $100,000 grows to $215,000 over 10 years.

Winner? Real estate wins in total asset value due to leverage, while stocks win in liquidity and passive management.

4. Tax Benefits

Real estate is packed with tax advantages:

✅ Depreciation: Property owners can write off wear and tear, reducing taxable income.
✅ Mortgage Interest Deductions: Homeowners and investors can deduct interest paid on loans.
✅ 1031 Exchange: Investors can sell and reinvest profits into another property tax-free.

Stocks? Tax benefits are limited:

🔹 Capital Gains Tax: Jordan pays 15-20% on profits if he sells.
🔹 Dividend Tax: Some stocks pay dividends, but they’re taxed annually.

Winner? Real estate investors often pay less tax and keep more profit.

What Could $100,000 Look Like in 2035?

So, Which Investment Wins?

It depends on your goals, risk tolerance, and investment style:

• Choose Real Estate if you want a tangible asset, leverage, steady income, and tax benefits.
• Choose Stocks if you want liquidity, passive investing, and lower management effort.

Both can be excellent investments—but for long-term wealth building, real estate’s leverage and tax advantages often outperform stocks in net worth growth.

Final Thought:

Why not do both? Many successful investors balance real estate for stability and leverage with stocks for liquidity and diversification. The key is choosing the right strategy based on your financial goals.

Want help finding the right real estate investment? Let’s talk!