7 Good reasons why Real Estate is a better Investment than Gold or Stocks:
1. Leverage
Real Estate is the only investment option where you can purchase a property worth Rs. 1 Crore by paying only 5 Lacs down payment, today most developers in alliance with finance companies are offering attractive schemes of only 5-20% down payment balance at the time of possession or structured to suit your convenience. Leveraging in stocks with derivatives needs expertise and tends to be very risky.
Real Estate is the only investment option where you can purchase a property worth Rs. 1 Crore by paying only 5 Lacs down payment, today most developers in alliance with finance companies are offering attractive schemes of only 5-20% down payment balance at the time of possession or structured to suit your convenience. Leveraging in stocks with derivatives needs expertise and tends to be very risky.
2. Tax Benefits + Capital Appreciation
• Real estate investment is also beneficial because of tax exemption up to Rs. 2.5 Lacs on Interest amount and up to Rs. 1.5 Lac on Principal amount.
• When investing in an equity fund, an investor has to first decide which level of the market and fund category to invest in like, diversified, index, large/mid/small cap fund, sector-specific fund, etc.
• Similarly, while investing in a DF (Debt Fund), an investor has to decide when, at what level of interest rate and which scheme to invest in – FMP, liquid funds, ultra-short term, short term, income funds, gilt funds, etc. He needs to understand and appreciate the key risk factors affecting DF i.e. interest rate risks.
• There are a lot of factors to be considered before investing in an Equity / Debt fund, involves serious strategic analysis, not easy for everyone to understand and implement.
• Real estate investment is also beneficial because of tax exemption up to Rs. 2.5 Lacs on Interest amount and up to Rs. 1.5 Lac on Principal amount.
• When investing in an equity fund, an investor has to first decide which level of the market and fund category to invest in like, diversified, index, large/mid/small cap fund, sector-specific fund, etc.
• Similarly, while investing in a DF (Debt Fund), an investor has to decide when, at what level of interest rate and which scheme to invest in – FMP, liquid funds, ultra-short term, short term, income funds, gilt funds, etc. He needs to understand and appreciate the key risk factors affecting DF i.e. interest rate risks.
• There are a lot of factors to be considered before investing in an Equity / Debt fund, involves serious strategic analysis, not easy for everyone to understand and implement.
3. Reverse Mortgage
A Reverse Mortgage is a type of mortgage in which a homeowner can borrow money against the value of their existing property. It is a special type of loan against a home that allows the borrower to convert a portion of equity in the property into cash which they can receive on a monthly basis for all their life, which is not possible in other asset class.
A Reverse Mortgage is a type of mortgage in which a homeowner can borrow money against the value of their existing property. It is a special type of loan against a home that allows the borrower to convert a portion of equity in the property into cash which they can receive on a monthly basis for all their life, which is not possible in other asset class.
4. Low Volatility
Prices are liable to change rapidly and unpredictably in the case of Stocks and Gold, whereas Real Estate prices change moderately and consistently. Fluctuating and Volatility of prices increase the risk involved in Stocks and Gold.
Prices are liable to change rapidly and unpredictably in the case of Stocks and Gold, whereas Real Estate prices change moderately and consistently. Fluctuating and Volatility of prices increase the risk involved in Stocks and Gold.
5. Supply of Land is limited
As we all know, the supply of Land is limited as compared to that of Gold or Stocks. Since the supply is less, Real Estate prices will keep increasing in the long term.
"The best investment on earth is earth".
As we all know, the supply of Land is limited as compared to that of Gold or Stocks. Since the supply is less, Real Estate prices will keep increasing in the long term.
"The best investment on earth is earth".
6. Need v/s Want
Home-purchase is a need. It is one of the basic necessities of life. Whereas Gold is more of a Want than a Desire. We cannot compromise on our needs but we can definitely compromise on our wants.
Home-purchase is a need. It is one of the basic necessities of life. Whereas Gold is more of a Want than a Desire. We cannot compromise on our needs but we can definitely compromise on our wants.
7. Regular Income from Real Estate Investment
An Investment in Real Estate can yield a regular income in the form of Rent which can help you to hold the property for a long term, which is not possible with Gold and even though stocks or equity of good companies declare dividends they are not consistent and if at all are paid annually.
An Investment in Real Estate can yield a regular income in the form of Rent which can help you to hold the property for a long term, which is not possible with Gold and even though stocks or equity of good companies declare dividends they are not consistent and if at all are paid annually.
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