Investment on any kind of proposition, makes it debatable based on the kind of returns you expect from the investment avenue.
Real estate or stocks, gold or mutual funds are common types of investment avenues, used by most investors. A comparision on best investment class, based on the risk appetite and returns expected by each investor makes it a considerable investment proposition.
Whether one should be investing in property and or investing in stocks are the most debatable options for most investors. Although both are completely different ball games, there is always a long-standing debate. While stock market is thought as one which gives great returns yet comes with its volatility with unpredictable ups and downs, real estate is considered very hard to move out from, unstable and is often a long-term investment yet bringing in great returns. Real estate or stocks both have different investment goals for different set of investors.
Real estate and stocks are different, while real estate investment involves a lot of complicated procedures, right from analyzing your own personal investment goals, research about the kind of property investment, builder, locality, government regulations, documentation and so on. Investing in stock markets can be done with few documentation papers and an investment as less as INR 500/-, right in the comfort of your home.
Each investment option provides a range of benefits be it real estate, equity or any other investment option. To build long term wealth from any investment option, the success rate in any of the assets depends on the knowledge of the asset class, inclination, drivers of the investment and risk taking ability of the individual investor.
Investment in Real Estate
Real Estate is a tangible asset. It could be any kind of property – house, flat, villa, plot, or land. It can be seen, felt and utilized for various purposes. You can do a complete research, inspect and be assured before investing in the property.
You have complete control over your real estate investment returns. Whatever you decide to do with the investment is your call. Renting it out, creating a commercial or residential structure, make repairs or sell it, is all your decision.
It is one of those rare investment class which is least affected with economic volatilities. It appreciates over time as well as one which rises with inflation.
Investment in real estate requires constant attention and long term care and focus.
Investment in Stock Market
Investment in stocks requires very little investment amount, research and long term attention. They are low-maintenance and require one time investment after the initial purchase and will pay out dividends as they perform.
The minimum investment amount in stocks investment is less than 500/- and can be done by young investors without much of documentation hassle. Starting young has benefits, where you can maximize the potential growth. You decide the volume and you decide kind of shares you want to invest in.
Historically, stocks have a high rate of return. When you buy shares, you buy a piece of company.
You can invest in shares across different sectors and industries, companies not only with a national presence but global presence as well.
Why should you choose real estate investment?
When you are sure of investing your money for a long period of time, expect to invest with high returns, real estate investment is an ideal choice. Real estate investing provides for a controllable amount of risk-taking mechanism that other financial assets may not match.
It’s tangible in nature, giving the investor a sense of satisfaction and considerable calmness compared to other asset classes, knowing it is more constant then other investment classes.
However, a few of the things which need to be considered before investing in real estate are:
1. Risks involved in the market and the economy .
2. Area/locality/neighbourhood where the property is situated in.
3. Large sum of capital required to invest in real estate industry.
4. Nature and kind of property.
5. Other legal, administrative and taxation costs involved.
When and how to start investing, real estate or stocks, both are smart investment moves, and is more of your own personal preference. The biggest advantage of investing in real estate is you can buy at below market rates, add significant value, and rent out as well to keep in a positive cash flow.
Right property investment, can lead to more growth and returns and provide more than your initial investment. With constant cashflows, sufficient income can be raised and you have control over your investment to increase its value.
Irrespective of whatever investment you may choose, make sure to put in sufficient time and efforts in researching the investment opportunity carefully. Real estate can guarantee you great returns but it all comes down to choosing the right property.