Over the years, we have seen that both real estate and the stock market have different prospects for their investment. They both carry advantages and disadvantages of their own. While real estate helps the investor to generate consistent wealth and long-term appreciation. On the other side stock investment, you receive ownership in the company and when the time is good you generate profit.
What is real estate investment?
Real estate investment means purchasing the properties to create wealth generation and far perform the stock market if it goes in the right direction. Real estate is tangible and can be touched physically therefore, for many investors feels more real.
What is the stock market investment?
The stock market is the platform where the investor buys and sells the stock according to their risk appetite. They invest in companies with the prospect of gaining profit if the company’s value goes up and if they make a profit. Those people who invest with the help of SEBI registered stock advisory company that investors always gain profit.
Let’s find out the difference between real estate and stock market investing: –
|Cash Flow||It generate cash flow for long term until you sell it||It generates cash flow regularly|
|Time and efforts||It needs delegate research before investing||It needs only diligent oversight and constant interaction|
|Liquidity||Can sell stock anytime when need cash||It takes at least months to convert into cash|
|Management cost||It only have brokerage charges||It only have maintenance cost|
|Diversification||Diversify your investment within several stock and investment instruments||Money can be tied up only in few properties|
|Volatility||Price can be changed daily||It takes months or year to change in price|
- Investing in real estate vs. stock: Cash flow: – If you are investing in real estate then you have to know that you are buying physical land and property, which going to give you long-term benefits when you sell it or by rental income. Investing in real estate can cost you some expenses like tax, and maintenance charges while waiting to sell to a developer or buyer.
While on the other side stock investing isn’t the same as cash flow from renting or from the property you own. However, cash flow can be generated in the form of a long holding of shares and the form of a dividend.
- Investing in real estate vs. stock: Time and efforts: – Investing in real estate takes lots of time and effort. Sometimes you have to deal with emergency calls like a gas leak, electric shortage, etc. That creates big hectic sometimes to manage all these situations. If you hire a property manager to take care of your property and your all-over investment, it still required occasional meetings.
While on the other side investing in the stock market is less time-consuming and effort. You just have to invest in research companies not according to company performance you will get returns. Research companies before investing can take time and effort but only once.
- Investing in real estate vs. stock: liquidity: – In terms of liquidity means that investment can convert into cash easily. Stocks are far more easily liquid than real estate. You can sell your position within a sec or more days. It may take 3 days to get your cash. But in real estate when you want to sell your property for cash it can take at least a month to convert it into cash.
- Investing in real estate vs. stock: Management cost: – Management cost can be higher in real estate as you have to pay taxes, maintenance fees, insurance, and others if your property is unoccupied. You only have to pay brokerage charges to the mutual fund manager who is managing your portfolio.
- Investing in real estate vs. stock: Diversification: – You get long-term capital gain in both real estate and stock. You can diversify much more quickly in stocks as compared to real estate. You can buy the stock at one time while diversifying in different companies. It means if you make a loss in one company you have another option to cover the risk. While on the real estate you just diversify it into a few properties because it is a much heavier investment as compared to stocks. For stock market investment there are many companies that can help for investment and they are SEBI registered stock advisory company.
- Investing in real estate vs. stock: Volatility: – Real estate investment is less volatile as compared to the investment in stocks. The price of property changes after decades or after year which give enough chance to investor to sell out the property if they found themselves at loss. But in stock, it’s different because its highly volatile price changes in the stock market within a fraction of sec, days. If you want to make money quickly then the stock market is not a good option for you.
So here we describe that which is better for investment real state is better or stock market is better after reading this blog any one can guess which is better, Every one can start investing in share market is very easily and also start with very low price but always remember without taking investment advisor don’t invest your money it can be harm full for your portfolio.