In today’s time, it is essential to make investments, and the two most favorite investment options are Real Estate and Stock Market. Although stocks are a profitable investment option, buying real estate is also very profitable. Investing in real estate or stock is a personal choice that depends on your financial condition, risk-taking ability, financial goal, and investment style.
Stock Market
Stocks are always subject to market situations and have an inflationary and economic trap. The best part about investing in stocks is that they don’t require a big investment. You can start investing with a small amount, and they can be easily bought and sold. When you buy a stock, you buy a tiny part of that company. Overall, you can make money in the stock market in two ways: dividends and value appreciation as the company’s stock increases.
Real Estate
Real estate investment is not as liquid as stocks and requires enormous money and time. However, under the right circumstances, real estate can be a good option for stocks with high returns, low risk, and a broad scope of expansion in investment. In real estate investment, you buy physical property for self-use or investment. Many real estate investors make money by generating monthly rental income and appreciation as the property’s value goes up.
Things to Remember While Making Investment in Stock Market
- Investment in the stock market is a long-term investment process, though but not as long as real estate investment
- Stock market investment is an easy process. All you need is to find a reliable stock broker, open a Demat and trading account, and link it to your bank account, and all these things can be done online without going anywhere
- Stock market investment is exposed to market volatility but usually generates higher returns in the long term. However, sometimes, misleading market trends often make investors make wrong buying and selling decisions
- If you want to sell your stocks, you can do this anytime during market hours. You can also liquidate your equity partially to meet your urgent financial needs
Things to Remember While Making Real Estate Investment
- Real Estate Investment is a long-term investment that you need to hold till the market price rises to its full potential
- It is a time-consuming process as it requires profound research to make the right choice and followed by legal paperwork
- This type of investment is exposed to market risks but holds it till the market prices rise, which can generate high returns
- If you have to liquidate your investment, you have to wait for the right market conditions to find the buyer
Real Estate Investment Vs. Investment in Stock Market
Investment in Real Estate Have the Potential for Steady Cash Flow
Buying an income-generating rental property will ensure you can receive a consistent income for many years. You can invest in residential or commercial property and get monthly rent and appreciation in the value of the property at the same time.
On the other hand, investments in stocks don’t have the same potential for cash flow as rental property investments. This is because you only get income from stock only when they are sold. So you may get dividends on stocks monthly, quarterly, or annual, but the amount would still be significantly less than the monthly income you can get by renting out a property.
Managing a Real Estate Investment Can Be Outsourced
Managing a real estate investment is not an easy task. You must find tenants, collect rent, maintain the property and pay taxes. But you can outsource such tasks to an experienced property management company (Krisim Real Estate).
You also pay your mutual fund manager fees to manage your stock investments. Property management fees are usually relatively low as compared to stock management. Property management fees are usually meager compared to the profits you can get from a well-managed rental property.
Stocks Can Be Extremely Volatile
One of the main benefits of investing in real estate is that it protects against inflation. If you choose a suitable property for your investment, there are high chances that the appreciation rate of your property will surpass inflation.
On the other hand, the price of stocks isn’t always as steady as that of a real estate investment. Your Rupees 200 stock can quickly go to Rupees 50 or Rupees 300. This can be nerve-wracking for small investors, making planning your finances much more difficult.
Real Estate Investment Usually Appreciate with Time
As I mentioned earlier that if you invest in real estate for an extended period, the odds are that it will surely appreciate. Sometimes unforeseen things happen, and the value could go down, like during the recent pandemic. However, these occurrences aren’t very common, and it’s usually just a temporary decrease in the property value.
Generally, investment in land and buildings appreciate with time, making the investment worth more than what you invest.
The Bottom Line
Investment in real estate and stocks have its share of rewards and risks. However, investing in real estate is always ideal if your goal is to maximize your returns, reduce risks, and diversify your investment portfolio.
While real estate investments require lots of time and effort, hiring professional help is always an option. I can help you in the purchase, selling, or managing of your property and guide you toward making smart investment choices. Call 9599705565 or mail at hello@vikasjoshi.in today to learn more!