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4/20/2019

Equity Or Property? Choose Wisely...

Investing in real estate and stocks are the two common long term investment options in India. There’s always a long-standing debate among investors on which is a better investment option—real estate or stocks. 

Well, these are the two most popular asset classes and you'll always find several views on which investment option will make you richer in the years to come. There isn’t really a perfect answer to this question since it depends on individual personality, preferences and financial objectives. Since both have proven worthy of building great wealth over time. Let’s face it: investing in the real estate offers many advantages, and investors can enjoy a steady cash flow that may lead to financial freedom. Let us look at some of the advantages this popular choice in a little more detail.

Positive Cash Flow

As the famous saying goes, “Cash is king.” Whether you choose the stock or real estate for your investment, you are driven by one motivation – to make more money so that you can reinvest or save for your retirement. Rental properties cover the expense of the investor such as property taxes, mortgage payments, operation costs, etc. Buying the right property is a key for positive cash flow.

Real Estate Investing Is a Hedge Against Inflation
While most investors fear inflation, but this is not the case if you are investing in real estate. Investing in real estate is an excellent hedge against inflation. As the market price goes up, so does the rental income you get from your property and your investment’s value. This means that the investors of real estate are protected against both the immediate and long-term effects of inflation. However, stock investments are not as directly linked to inflationary measures. The stock market cannot give you the same potential inflation protection as real estate.

Real Estate: Buy Low And Sell High
As we are aware of the fact that money is made in the stock market by buying low and selling high. But it is almost impossible for most investors to do so consistently. It is possible that you can’t have enough understanding of an individual company, its sector, management, competitors, etc. On the other hand, with residential real estate, you are dealing with individual properties and each property is different in terms of location, size, facilities, features and other criteria. In real estate, there are several little markets from where you find the best deals and can “buy low.” Also, you can “sell high” if you know the type of housing that is in high demand.

Real Estate: A Stable Investment
Real estate investment does not wildly fluctuate as the stock market does. Therefore, investors do not have to worry about the value of their real estate property declining dramatically overnight based on capital contributions or because of political volatility. This makes real estate a safe and stable investment.

ATangible asset
Real estate is something you can actually see, experience and utilize. You can either live in the property or lease it out. On the other hand, stocks are now ticker symbols and numbers. Moreover, before you buy property, you can inspect the property whether it is in good condition or not.


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