Real Estate vs. Stocks Investment
Your hard-earned money deserves to be invested in a secure manner – with the added bonus of assured growth in value. Two ideal investment options are real estate and stocks. Choosing which is the better of the two largely depends on your personal financial goals, income, risk tolerance as well as your responsibilities and commitments.
While real estate takes time to liquidate, it is a solid asset that can provide a secondary income in the form of rent, while also appreciating in value. Stocks on the other hand are easy to buy and sell, but are subject to market and economic risks. Before taking a call on which to invest in, here is an in-depth look at these two investment options:
Real Estate
1. When it comes to real estate investment, what most people miss is the research that should go into it for the investment to be viable. It’s a great way to earn a passive income over an extended period of time. Even as your capital investment remains safe and growing.
2. Aside from this, there are a number of tax benefits that go along with real estate investment. Even if you sell off your property, you can avoid paying taxes by investing in another one.
3. Since real estate can be leveraged, you can expand your holdings even when you can’t afford to pay outright cash for them. They also provide an ideal hedge or protection against inflation.
4. Real estate is more appealing as an investment as it’s a tangible asset that can be controlled and diversified when needed. It is also a physical or concrete investment for which the investor can be held responsible.
5. However, do note that real estate investments can’t be liquidated at the tap of a button. It can take a few weeks or more. But if you are in a financial crisis, you can always get an easy loan against the real estate!
6. You should also be aware that reaping profits in real estate investment takes it’s time, so you need to sit tight for a while. The benefits are usually high and worth the wait though.
Stocks
1. Most people are aware of stock market investment courtesy of the media attention given to it. Investing in stock is easier too as you don’t need a large sum of money to invest. However, to make substantial profits, you do need to invest sufficient funds. The more shares of stocks you own, the more the profits you can earn.
2. There are two ways to make money out of stocks – either through dividends or through value appreciation of the company’s stock shares.
3. Aside from this, stocks are known to be more volatile than real estate, with wild fluctuations in values often triggering panic selling and loss of investment. A very calm mind and unshakable mindset is required to stay invested in the stock market.
4. Investing in stocks is highly risky as they are affected by world events as well as monetary policies, tax revisions, changes in interest rates, etc. Returns on investments are often lower than expectation due to the numerous external factors that can affect it.
5. Then there are some stocks that move sideways for years, keeping your investment in a stagnant stage, with no increment benefits.
6. It’s easier to liquidate your stocks investments, but they might lead to capital gains tax, and generally result in making your tax burden that much heavier.
Everything said and done, it should be noted that investing 1lakh in stocks will get you stocks worth 1 lakh. Investing 1 lakh in real estate as down-payment can however get you a property worth 10 lakhs (with tax-deductible EMIs)! And unlike stock sales, real estate capital gains taxes can be deferred by investing in another property!
So, if you are looking to invest in real estate, then check out the immaculately-designed apartments and villas in prime locations in Thrissur. Owned by the much-awarded Vishraam builders, these homes offer excellent investment opportunities, both in terms of rent as well as capital gains. With the experience of over 45 projects over the last 22 years, Vishraam also has a kitty of 2000+ satisfied customers!
Come have a look at a Vishraam home today!
