Gold IRA VS Real Estate: Which is a Better Investment?

Before you put your money into anything, you want to be sure that the things you invest in will help you reach your financial goals and give you good profits. It’s a good idea to compare gold and real estate when deciding how to mix up and spread out your various gold vs. real estate investments. But how can you figure out which one is better for you โ€” or maybe a mix of both?

Differences Between Gold and Real Estate Investments

Gold and real estate are very different investment options, each with advantages and disadvantages for your portfolio. Understanding how these differences affect your real estate investment strategy, and opportunities can help you make better decisions.

Liquidity and Accessibility

Gold is easier to buy and sell compared to real estate properties. You can buy gold from online dealers or physical stores, and when you want to sell it, you can often sell it back to the dealer at the current price. Gold is also a direct investment option, which makes it accessible to new real estate investors.

Real estate, on the other hand, takes more time and effort to buy and sell. It can involve getting a mortgage, making offers, transferring property ownership, and dealing with inspections.\ Real estate investing is also not accessible to investors who don’t have enough money for a down payment or don’t qualify for a mortgage.

Diversification and Risk Management

Both gold and real estate can help diversify your investment portfolio and balance the risks of other investments like stocks and bonds. Gold is generally a safe investment considered a low-risk investment, but its returns are relatively low. Real estate can be riskier, but your returns depend on your actions, such as upgrading the property investment.


The gold investment gives you something you can physically possess and see. Many investors like this aspect of gold comparing real estate investments. Real estate is also tangible, but you have less control over the properties if you invest in real estate through long-term investment trusts or groups.


When investing in precious metals or gold, you must pay in cash. Taking a loan for gold investment is usually not a good idea unless you get a low-interest rate that allows you to make more money than you pay in interest.

It would be best if you usually had cash for a down payment and closing costs for real estate. Many investors use mortgages to buy real estate, but ensuring the mortgage interest- rate is low enough that your returns will cover your monthly payments is essential. Once you own a property, you can use it as collateral to buy more properties.


Real estate investors tend to be more volatile than gold. Many factors, like interest rates, real estate property availability, housing prices, and inflation, affect real estate’s value. Market trends also play a role, challenging buying or selling at certain times. Gold is generally more stable in the long term, but its value can be affected by short-term factors like inflation and supply and demand.

Maintenance Costs

Real estate requires ongoing maintenance to maintain its value. Whether you rent or live in a rental property, you must set aside money for regular maintenance. Typically, you should budget around 1% to 4% of the property’s purchase price each year.

On paper money, on the other hand, gold doesn’t require any maintenance as long as you store it in a controlled environment. However, if you keep your gold in a private vault or depository, you may have to pay storage fees.

Also Read:  Gold IRA vs. Gold ETF

What Taxes Do You Pay When Investing in Gold and Real Estate?

The taxes you pay when investing in gold or real estate depend on how you invest.

If you buy physical gold and sell it for a profit, the IRS considers it a “collectible,” and you’ll have to pay income tax. If you held the gold for over a year, your monthly income tax rate could be as high as 28%. Did you know that gold-backed exchange-traded funds selling gold are also subject to income tax? On the other hand, gold mining stocks are taxed at the capital gains tax rate.

When you own real property value of the estate, you may have to pay different types of taxes:

  • Property taxes: These vary depending on where your property is located. The average property tax rate in the U.S. is 1.11%.
  • Net investment income tax: If you have a high income and make money from your real estate investment, you may have to pay an additional tax called the net investment income tax.
  • Real estate income tax: If you rent out your real estate and earn income from it, you’ll have to pay rental income tax on that rental income.
  • Capital gains taxes: If you sell your real estate for more than what you originally paid, you’ll owe capital gains tax on the profit.
  • Individual income taxes: Even if you don’t own property directly but invest in funds backed by real estate, you may still have to pay individual income taxes on the income you earn from those investments.

How Much Should You Invest in Gold and Real Estate?

Adding gold and real estate to your investment portfolio is a good idea to spread out your gold investments. But it’s important to consider the type of investments and the size of your portfolio. Many experts suggest limiting how much you invest in gold prices and other alternative options. We recommend consulting with your investment advisor to identify the percentage of your assets that should be allocated to real estate investment or gold investments.

Tim Schmidt


Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started IRA Investing to share his expertise in using his Self-Directed IRA for alternative investments. His views on retirement investing have been highlighted in USA Today, Business Insider, Tech Times, and more. He invested with Goldco.