Ask a real estate agent which investment option is better and she'll tell you "Property". Ask a stock broker which is the better performer and he'll unequivocally state "Stocks." So which is better?

You can make up your own mind but here's six reason's why I'd invest in stocks over property.

For the record, I'm not saying that I wouldn't invest in real estate or that it's a bad idea to do so. I'm merely stating that there are reasons why stocks are much better

1. Liquidity

The beauty of investing in stocks is that if everything goes pear-shaped, either with your investment or your own life situation, you can readily liquidate them. In fact, you could have them sold and the money transferred to your bank account within an hour.

To liquidate property requires are far more tedious and time consuming exercise. The property needs to be listed with an agent who will then network with clients to view the property. If there is no interest at this level, the property will be advertised and in due course a buyer will be sourced.

Then there's the settlement period which could take from between 1-3 months before you actually see your money.

2. Transaction costs

Transaction costs when buying a property include stamp duty tax, conveyancing fees, mortgage transfer fees etc and could be well into the thousands of dollars. Selling your property will also incur fees including the agents fee, unless you go down the for sale by owner road and perhaps some legal costs. These exit fees will also be in the thousands of dollars.

Stocks, on the other hand, enjoy marginal transaction costs. Taxes may apply and perhaps a small percentage by a broker but nowhere near the amount we're prescribing with a property transaction.

3. Stocks outperform property in the long term

Traditionally stocks outperform property over the long term trend. Why? Because property is an asset used by companies which obviously affects their share price. Any upswing in property values is reflected in the company's balance sheet which determines their dividends or stock value. Downturns are also measured against the company's financials.

If the companies were no longer making profits then stocks would go down but so too would the value of property. People would be laid off, property values would fall as people try to reduce their mortgage debt and the value of stocks would still remain higher.

4. Ability to enter the market

Try getting into the property market with $5,000 and you'll find listed property trusts may be your only avenue (although most of these require larger entrance investments). However, with $5,000 you could start investing in stocks immediately.

This is the problem for new home buyers. Coming up with a 10-20% deposit on a $400k home is near on impossible. I imagine that in years to come many young people will turn to investing in the stock market long before they contemplate buying a house.

5. Maintenance costs

Stocks cost nothing to keep. Real estate, on the other hand, will consume large chunks of maintenance money. At the very least fashions and trends change and there is always the need to update and keep your property relevant in a fickle market - unless your prepared to accept less when selling it.

Gardens, lawns, fences, plumbing, painted areas... the list goes on and on - and on.

6. Transaction ease

This is where stocks stand out. As previously mentioned when it comes to liquidity stocks are very easy to sell and buy. All it takes is a phone call or internet transaction and the investment is yours.

Real estate takes much more. Time, legalese, paperwork etc makes a transaction to purchase or sell property look more like signing a peace treaty with a warring nation.

While property seems to have many downsides to investing than stocks, there is another option than buying a physical property - Managed Property Trusts. These are similar to stocks in that you are buying a share of the property rather than the whole property.

Many managed property trusts are listed on the stock exchange as well and enjoy all the convenience of buying and selling as stocks have.