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Posted on 26th Oct, 2016

What’s better for Investment – Real Estate or Stock Market?

It becomes a major headache to get an answer for that very important question – where to invest your hard-earned money? Property or the stock market? There are a lot of myths and facts involved in taking the right decision for investing your money. Let’s take a closer look:

When you buy a property, you have full control over it; you get to make the decision on how much to spend on repairs, how much to charge for rent, who your tenants should be and when to sell off the property. Owning stocks of a company would give you almost no powers to decide on what should happen with your investment.

A real estate investment is tangible, something you can physically touch, and for many investors, such tangible investing makes them feel psychologically more secure. Stocks, on the other hand, are something that you never get to see, it’s just some printed advice that you can never interact with.

The state of the economy touches on all aspects of businesses, but real estate gets less affected as compared to the stock market which is more volatile and sensitive to swings. For stability, real estate makes for a better investment as it’s more isolated from the global economy.

Also, as prices of properties tend to follow the inflation graph, it means that the value of your property has gone up as well as making it eligible for rent hikes; it also means that your loan payments remain the same, translating into greater gains. This isn’t true for stocks as they don’t necessarily follow the graph.

Buying into real estate is relatively easy as you only need to look into the realistic expenses and calculated rented income to check if it’s a feasible investment. With the stock market, analysing is complicated, as you need to factor in the underlying equity component aside from the cash flow. And then you have to depend on the figures the company puts out to know the actual value of your investment; needless to say, these values can be manipulated so easily to keep investors happy!

With real estate, you can start investing at a younger age as capital involved is less and the tenant can help in financing the remaining loan on your rental property. With stocks, the capital has to come from you. You will also avail of tax benefits which are something not possible with stocks.

The intention here is not to show you that property investment is the best, rather it’s to show you the benefits attached to it. So take the course best suited to your future plans!

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