The oldest debate: Property or stocks?

The oldest debate in personal finance: Property or stocks?

Most charts floating online would show a clear winner: Stocks 📊

Although it isn't that simple. The house price index, often excludes every euro/dollar of rent the property earned along the way. The stock figure is a total return index, dividends reinvested. So one has its income counted and the other doesn't. Include rent and the gap can narrow quite a lot.

It also ignores the thing that makes property different from every other asset most people own: Leverage.

Few banks lend you €400,000 at 3% to buy an index fund. But they'll do it for a flat. If a property rises 5% and you put down 20%, your return on the money you actually invested is far higher than 5%. That obviously cuts both ways which people also tend to forget.

🏠 𝗥𝗲𝗮𝗹 𝗲𝘀𝘁𝗮𝘁𝗲 has a lot going for it: Leverage, rental income, you can live in it (not always captured in the spreadsheet), often quite gentle tax treatment, harder to panic-sell.

But it also has high concentration risk (one asset, one street, one city), Illiquid, expensive to sell, maintenance, vacancy, tenants, insurance, the leverage that helps on the way up hurts on the way down, property taxes, etc.

📈 What 𝘀𝘁𝗼𝗰𝗸𝘀 have going for them: Historically the strongest long-run returns of any liquid asset class, high diversification, highly liquid and fractional (e.g. you can sell 0.25% of it tomorrow), no tenants, no insurance, no notary.

However, you might watch it fall 50% in real time, takes mental resilience to weather through, little practical leverage for a household, dividends are usually taxed on receipt (dragging compounding), and you can't live inside your ETFs.

‼️ 𝗧𝗮𝘅 ‼️ A critically important point, which surprisingly few people model in, is taxes. This varies significantly per jurisdiction and region and can flip the business case upside down. Net > Gross. Always worth remembering.

𝗧𝗶𝗺𝗲 𝗵𝗼𝗿𝗶𝘇𝗼𝗻 is another key element. Thirty years and stocks' volatility is just noise. Five years and it's everything.

𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆: if you might need the money at short notice, the asset you can't sell for four months is a different proposition regardless of its return.

👉 Which is why "property or stocks" has no universal answer, and anyone who gives you one confidently is telling you more about themselves and their choice than about your situation. The right answer depends on where you're taxed, what you already own, when you'll need the money, whether you can sleep through a 50% drawdown, and whether you'd actually be a good landlord.

That's exactly why we built Senso. Not to tell anyone what to buy, but to work through it in your own context: your jurisdiction, your existing exposure, your time horizon, your appetite for risk. Then you can decide, or take a properly informed chat with your adviser.

Real estate might be right for your neighbor and wrong for you. Be Senso.