Which is Better – Investing in Real Estate or Stocks?
Feb 12, 2018 Real Estate News
We all think of investing some part of our income to earn some extra bucks. Real estate and stocks are two such domain that comes to our mind when we think about making an investment. But it's a tough and quite confusing task to decide where to invest.
Someone who has never invested in stocks and does not have any clue about the same, will not understand the ups and downs of the market and hence will end up making huge mistakes that can put him in miserable condition. It is similar in case of real estate as well. If you do not invest in a good project and property then you might be in trouble while losing a huge portion of your earning. both have advantages and disadvantages which the investors need to understand while investing.
In terms of return, stocks are definitely a better option as they offer a better return. The margin of profit in stocks is higher. Investing in stocks also offer flexibility and liquidity which real estate does not. But investing in stocks without any knowledge and understanding can be very risky.
Whereas in India, people majorly prefer investing in real estate as it gives a feeling of ownership, becomes a permanent asset and also understanding the valuation of the property is easier than that of stocks. More than investment, real estate offers a psychological satisfaction and security. The return on investment in real estate is constant while in stocks, its unpredictable. But you need to be very careful while investing in real estate as well because of one wrong step and you can lose your entire savings. Experts suggest that the monthly instalments should not be more than 30 to 35 percent of your gross monthly income. While calculating the monthly home loan instalment, you also need to consider your monthly income now as well as how much expected in the future, regular expenses, and also the family member’s income. It is also advised not to spend more than 50 percent of the family income on a monthly EMI.
Apart from the monthly instalments the investor also needs to remember the cost you need to pay to get hold of the property. Expecting that you can pay more than your income can put you into financial stress. If you cannot afford the property that you like then go for an affordable one in outskirts of the city.
The investors also need to remember about the stamp duty charges. You are supposed to pay stamp duty at every time of transfer of ownership. Stamp duty is calculated based on the total value of the property. However, the stamp duty charges vary from city to city.
Someone who has never invested in stocks and does not have any clue about the same, will not understand the ups and downs of the market and hence will end up making huge mistakes that can put him in miserable condition. It is similar in case of real estate as well. If you do not invest in a good project and property then you might be in trouble while losing a huge portion of your earning. both have advantages and disadvantages which the investors need to understand while investing.
In terms of return, stocks are definitely a better option as they offer a better return. The margin of profit in stocks is higher. Investing in stocks also offer flexibility and liquidity which real estate does not. But investing in stocks without any knowledge and understanding can be very risky.
Whereas in India, people majorly prefer investing in real estate as it gives a feeling of ownership, becomes a permanent asset and also understanding the valuation of the property is easier than that of stocks. More than investment, real estate offers a psychological satisfaction and security. The return on investment in real estate is constant while in stocks, its unpredictable. But you need to be very careful while investing in real estate as well because of one wrong step and you can lose your entire savings. Experts suggest that the monthly instalments should not be more than 30 to 35 percent of your gross monthly income. While calculating the monthly home loan instalment, you also need to consider your monthly income now as well as how much expected in the future, regular expenses, and also the family member’s income. It is also advised not to spend more than 50 percent of the family income on a monthly EMI.
Apart from the monthly instalments the investor also needs to remember the cost you need to pay to get hold of the property. Expecting that you can pay more than your income can put you into financial stress. If you cannot afford the property that you like then go for an affordable one in outskirts of the city.
The investors also need to remember about the stamp duty charges. You are supposed to pay stamp duty at every time of transfer of ownership. Stamp duty is calculated based on the total value of the property. However, the stamp duty charges vary from city to city.
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