Profit is the ultimate
driving factor behind any investment; therefore, it is worth assessing
available options for the most perfect choice. Ideally, an investment should be
safe and meet with your expectations of returns. And, when it comes to the
choice, what turns important is your preference, requirement, future plans,
return expectations and availability of finance. So, these factors have to be
kept in mind while exploring the options of investment. The benefits and
drawbacks of all options should be analyzed to arrive at a final conclusion.
Here two of the most popular options i.e real estate and
stocks are analyzed.
Real
Estate
Firstly, let’s find
out what a real estate investment means exactly. A real estate investment means
spending money on property or land. The amount involved varies based on the
concerned property, type of property, location, taxes, maintenance etc.
Stocks
Buying stocks means
investing in a piece of company regardless of its work. In other words, a stock
means the investor is entitled for a share in its profit; it could be a small
or big amount.
Now that we have
defined both the investment options, here is further information on them.
When you invest in
real estate, it automatically turns into a viable asset. Good returns in future
are a certainty, but the exact amount of returns is variable, in view of
location, depreciation in initial value and the development that happened in
the concerned area.
For instance, the
value of a flat or an apartment might suffer depreciation over time, say for
example 15 to 20 years or so. Yet, a property assures more money as compared
with initial investment. So, profit is guaranteed.
However, those opting
for land don’t have to worry about the issue as land prices will always show
upward trends.
Moreover, real estate
gives you many options. You can go for a house, villa, flat, land or even
commercial properties. Of late, more and more people are buying properties in
city’s outskirts due to low prices and excellent returns that are assured.
Yet another important
factor is the rental income from properties. Properties in premium locations
could fetch you significant and steady rentals.
And, as compared with
stocks, real estate is a safer option. You have control on your asset, which is
not the case with stocks.
The effect of
inflation on a real estate investment is lesser in comparison with stocks.
Yes, stocks have their
own advantages. An investment might be less hard work there compared to
managing a property or running a business. Those comfortable with retaining the
stocks for a long period could actually look forward to great returns. With
each year, the value could increase in sync with the concerned organization’s
growth.
Selling a stock is a
matter of minutes whereas a real estate deal might take even few weeks.
Many companies offer
shares at a much lesser price so that even middle class people could afford
them. Stocks are profitable when you try borrowing against them and they offer
more liquidity in comparison with real estate.
In short, many features
are involved here, i.e while distinguishing between a stock or real estate.
But, a house is mandatory and to deal with the inflation rates, real estate
could be a viable option.
