Buy-to-let vs stocks: 3 reasons why I’ll be investing money in UK shares in 2021

first_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Our 6 ‘Best Buys Now’ Shares Simply click below to discover how you can take advantage of this. “This Stock Could Be Like Buying Amazon in 1997” Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Enter Your Email Address Peter Stephens | Saturday, 9th January, 2021 Buy-to-let property and UK shares have been two very profitable assets for investors over recent decades. House prices have produced large returns despite experiencing challenging periods. Similarly, FTSE 100 shares have delivered high single-digit returns to catalyse investor portfolios.However, buying stocks in 2021 could prove to be a better idea than investing in buy-to-let property. Their lower valuations, the capacity to diversify in an uncertain economic environment, and tax advantages could make them a more logical move compared to buying properties.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The low valuations of UK sharesWhile property prices have soared to record highs across much of the UK in recent months, many UK shares continue to trade at low prices. Sectors that face challenging short-term outlooks, such as the energy and travel industries, contain a number of companies that are trading at very low prices.Where those businesses have the financial means to survive further disruption caused by the coronavirus pandemic, they could offer long-term capital growth potential.By contrast, high UK house prices may fail to continue rising at a fast pace. After all, affordability concerns could hold back their growth trajectory, as first-time buyers struggle to get onto the property ladder.Furthermore, factors such as rising unemployment and weak wage growth could mean many people postpone a house move or delay buying their first property. This may mean house price growth is subdued compared to its performance over the last year.Diversification potentialDiversifying among UK shares is a simple process. Any investor can build a portfolio containing multiple companies that operate in different sectors. This reduces their reliance on one business for returns. This means one struggling holding is unlikely to be too detrimental to their overall financial prospects.Building a diverse portfolio of buy-to-let properties is far more difficult. An investor needs vast sums of capital to do so. Even then, they’re limited to investing in the UK, whereas it’s possible to buy companies operating in different countries. Should there be an issue with rent payment or repairs to one property in a concentrated buy-to-let portfolio, it could mean financial disaster for an investor.Tax advantages of buying stocksPurchasing UK shares through a Stocks and Shares ISA means there’s no tax levied on returns or income payments. This is a much more favourable situation to that of buy-to-let investing.Various recent tax rises mean a property investor’s tax bill is likely to be much higher now than it was even a few years ago. With the cost of coronavirus yet to be confirmed, further such tax rises could be ahead.As such, opening a low-cost ISA that’s simple to operate could be a better idea than purchasing buy-to-let properties. It could produce significantly higher net returns that have a positive impact on an investor’s financial outlook. See all posts by Peter Stephens I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. 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