Future is ascertained and thus, we need to prepare for it. When it comes to deciding the best investment, we are often confused among real estate, gold or stocks. And this write-up is not about providing the answers, it is about putting the pros and cons in front of our readers for them to decide according to their financial profile. One need to access his present condition, future expectations, experience from the past investment, and ability to handle the risks.
There is no one right answer for the question. While having gold is the sign of affluence, own home is a symbol of self-reliance and pride. So, the first home is the priority for most of the people with some bank balance. So, the real question is what to opt; second home/ commercial asset or gold or stocks?
Why Real Estate?
If you want to cook on the steady cash flow from the rent, go for the real estate. The yield from the commercial units is fairly better than from the residential ones. You can opt from either if real estate is what you prefer. If you want to earn from the appreciation of the property, own a piece of land. They cost less and sell fast because as Mark Twain said: â€œBuy land, theyâ€™re not making it anymoreâ€. If you plan not to hold the property for that long, invest in the apartment units. There will always be a need for the affordable apartments to live in and thus, selling such units is easier.
Is it Real Estate or Gold?
Investing in gold is better when you have to liquidate the assets on a short duration of time. You cannot sell a property on such a short notice. Also, buying a gold is easier as compared to buying the real estate. The real estate market is not transparent. Many sellers do not do a full disclosure before selling the property and hence, it is always riskier than gold. Also, gold needs lesser upfront money than the real estate, so if you have fewer savings, go for gold. The only upside down that we see is that the gold is a dead weight and there cannot be a regular return from it, you collect when you sell, unlike real estate.
Is it Real Estate or Stocks?
Considering the short duration of time like a year or so, stocks gain a better output as compared to the real estate. They are highly liquid and can be sold easily without any fuss. But as we all know, the stock market is ascertain, the investor is never at rest worrying about the future after buying the stocks. Also, real estate loan offers tax deductions which cannot be claimed for the mutual funds. But there is no cost of ownership in the case of the stocks and mutual funds.
There is a risk in everything but you can minimise that risk by getting the optimum knowledge about what you are getting into. Besides illiquidity, the lack of transparency seems to be the major concern in the real estate market which can be better with the new Real Estate Regulation and Development Act. The key to successful investment is diversifying; invest your money at different places to get the best of all.