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Posted On March 24, 2020

Real estate vs. Stocks – Where to Invest and Why

Invest in Real Estate or Stock Market

When it comes to investment options, real estate and stocks have always locked in horns. As one faces the conundrum, it is worthwhile to say that both investing avenues have their fair share of merits and demerits. However, they also have a host of other advantages that makes them unique all the way. To ensure that you make a worthy investment, it is necessary that you form a good understanding of the positives and negatives of both real estate and stocks. Here’s a post that is aimed at helping you do just the same. Read on to find out more.

Let’s Start with Looking at Some of the Salient Features of the Real Estate Market:

Features of the Real Estate Market
  • Believed to be a long term investment, you will need to hold on to your property up till the time the market reaches its full potential.
  • Investing in real estate is a time-consuming process. For instance, if you are looking to buy an apartment, the process doesn’t end up paying upfront for the house. It involves a long line of paperwork and other legal activities as well.
  • Real estate, albeit gets exposed to multiple risks but also promises high returns.
  • Very less or limited option for diversification.

On the Other Hand, Stocks Represent a Whole Lot of Different Scenario:

Stocks Represent Scenario
  • Although a long term investment, compared to real estate it’s quite short in duration.
  • Investing in stocks is subjected to market risks as it totally depends on the economic scenario of a particular country. Also, not to forget that one needs to go through a lot to find the best and most reliable stockbroker to help you invest smartly.
  • Stock markets are widely exposed to the volatility of the market.
  • Often market trends mislead investors to make buying and selling decisions on impulse.
  • Easy option to liquidate your investment to meet your other needs.
  • Flexible exit norms.
  • Multiple diversification option for your funds working with a nominal account thus investing in equities of multiple companies.

Is Buying an Apartment or a Property the Best Investment Ever?

Investment on the Property

Investment decisions vary from one individual to another. With varying financial standpoint and associated objectives, investment option for a particular individual might not be suitable for another person. Hence, investing in real estate should only be considered when a property or an apartment has the following features:

Great locality – Locality is one of the prime concerns for anyone looking to buy an apartment. For instance, if you are looking to buy a 2BHK flat in North Kolkata, ensure the locality is good enough to stay in. Is it safe? Does it have convenience stores and shopping malls nearby? Does it have 24/7 security? What about hospitals and doctor clinics? How far are they located? Is there a good school or college nearby for your children? What are your conveyance options for daily transport? 

These are a handful of basic things that one needs to figure out before you purchase a property.

An investment for life – Remember, buying a house or an apartment is an asset for a lifetime. No matter who you are or what you do, always check for the legal papers and get it verified from a trusted lawyer. Never agree to shell out money before the project is completed and being handed over to you.

Lifestyle – Choosing an apartment has a lot to do with one’s lifestyle. These days, people crave for a lot more. Hence, while hunting for a suitable apartment, one should look for a handful of come of age amenities that include:

  • Community Halls
  • Games Room
  • Swimming Pool
  • Gymnasiums
  • Landscape Gardens
  • Decorated Terraces
  • Yoga or Meditation Room

Having said that, one should very well understand that investment real estate calls for a lump sum payment to be made for the full purchase or at the time when you officially resister you flat in the books of the government in your own name. Hence, one has to approach a bank and get an adequate amount of loan sanctioned or alternately build a corpus in advance.

The Return on Investment

The Return on Investment

The yield from investments made in real estate can’t really beat inflation. With fluctuating market prices, it might be a little bit difficult to gain monetary returns. Also, considering the fact that investment in real estate is way more expensive compared to stocks, it is only recommended for investors who have a solid substantial capital in store.

On the other hand, with stocks, individuals tend to invest in gaining ownership of a company or an organisation. When the company earns a profit, the same is automatically passed down on to the stockholders. Additionally, investors also stand eligible for dividends received on shares and selling the same the right time can give them healthy return.

Wrap Up

Investing in real estate requires one to get the right timing. If you have plans to sell your property in the long run, then you will need to identify the correct time when the prices are low and make a purchase, Alternately, one has to hold on to their horses until property prices skyrocket, when it will be viable to sell. However, if you plan on buying a residential property for your personal living, always choose to buy from reputed builders in Kolkata to avoid hassles related to legal and other formalities.

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