Real Estate or Equity? Which one is suited for you?

Hi folks,

Most of us face this dilemma whether real estate or equity whichone will suite you . What to opt when you have a corpus to invest? Let’s analyze the best option suited for you.

When you invest you look for security and price appreciation. If you would only have looked for security, nothing is safer than hoarding cash under your pillow. If you would only have opted for risk, you could have chosen gambling.

So, when we look at the perspective of security, we should first keep the idea that it’s not that real estate prices don’t fall. We have witnessed that in many parts of the major cities when metro projects were about to take place, prices were skyrocketed, but as the project languished, the prices decline substantially. The buyers found themselves with a mounting loan amount with depreciating value of their land/houses.

Now comes the rental aspect of real estate investment. The rental yield in India is 3%. The housing loan is 8% to 10%. The homeowners are always at a loss until the valuation rises exceptionally high which didn’t happen after 2015 in major parts of India.

Another important factor is, unlike equity, you can’t invest in real estate in a pocket-friendly manner. Suppose, you want to invest some 20k which you have got as a bonus. You can’t just buy one 1/100th part of the land which you want to buy. But you could easily buy a few stocks of the companies of your interest and can become a part-owner (however minuscule it maybe).

The ease of transaction and broker less factor act as a huge positive influence for equity investment, unlike real estate. You don’t just need a buyer but you need to face the hassle of a hundred other official norms and checks to sell your own property. Here, all you need to do is to just open the app and execute your order, and you are done!!

The maintenance of your property is another hassle. It doesn’t just require your time but it drains your wealth too at a rapid pace consistently. While equity investing is as hassle-free as anything.

Considering all these points, we could easily come to the conclusion that be it a small investor or a large shark, it’s always better to invest in equity if you need ease of transaction, hassle-free maintenance, growth and peace of mind.

Best regards,

StockTradingF&O team

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