real estate vs stock market

Real Estate vs Stock Market Returns- Which Investing Option is Better for Future?

By: AIPL Marketing
On: February 2nd, 2022

Investing your money in the right way ensures financial security for the present and the future both. Whether you are planning for retirement or creating an emergency fund, you will need a proper investment strategy that suits your budget. If we talk about the most popular investment options, two things come to our mind: buying a real estate property or investing in the stock market. The bigger question is, Real estate vs Stock market – which one is a better option?

There are a few basic differences between these two options, each one having its own advantages and disadvantages. If you want to compare Real estate vs stock market returns, it depends on when and how you do it. When you buy a property in a locality that is under development like new commercial projects in Gurgaon, Punjab etc. and plan to sell it after a few years, you will make a huge profit out of that. Also, if you invest in a company’s shares during its initial phase and it grows to become a well-established one, no real estate purchase can beat the returns you will get.

Overview – Real Estate vs Stock Market Returns

Real estate and the stock market both involve different risk factors and offer different opportunities. For a particular investor, real estate could be more suitable and for another investor, stocks can be a more profitable option. 

Let’s have a look at the salient features of Real estate vs stock market investment:

Real Estate:

  • A long-term investment option in which you have to wait for the market to rise.
  • Need to research a lot before making a purchase
  • Requires legal paperwork
  • Involved risks depending on the market

Stock Market:

  • Like real estate, it is also a long-term investment.
  • It starts with finding a reliable stockbroker. You also must open a Demat & trading account.
  • Sometimes, misleading market trends can cause major losses.

Real Estate vs Stock Market Returns

In terms of the returns you get on your investment; real estate is a much better option. The reason is, after investing in stocks, you make profit only when the company makes a profit. The case is different when you buy a property. Being a physical asset, real estate has intrinsic value. Even in a scenario of the market collapsing, your property is still going to be worth something. 

Investing in stock is a traditional and well-known option but buying a real estate property can prove to be a good alternative, only under the right circumstances. 

Why Invest in Real Estate?

Making a real estate investment can give you higher returns if the timing of purchase and sale is right. You have to research and figure out when the market prices are at their lowest. This is the best time to pick a property that fits your budget and wait for the prices to go up. If you choose a property with a good scope, high returns on your investment are guaranteed. 

This investment option requires a higher amount as compared to stocks but is also the better one. If you buy a cash-generating property like an apartment building, rental house etc. it gives you an option to create a passive income. It is additional to the profit you will make when the total value of your property will go up.

Wrapping It Up

If you are looking for an option to invest in for the long run, you should start planning to buy a property. This will not only help you to diversify your investment portfolio, but you can also reduce the risk factors and get high returns as well. 

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