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Which is better; real estate or equity investment?

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Which is better; real estate or equity (shares) investment?

Which is better; real estate or equity (shares) investment?

Probably the reason behind it is that there is an inherent belief that investment in shares or equity carries risk whereas investment in real estate or housing is secure. But this belief is wrong.

In the last 2 to 3 years, real estate market in India has gone down and people, who have invested in it around 2008, are struggling to get their principal back. Both investments have got their pros and cons. Investment in equity is easier to do and manage.

You can simply give a call to your broker to execute the trade if you are dealing offline and in case you have switched to online trading, then it’s even easier as you have to just login to your online trading accounts and in few clicks, your trade is done. You can easily monitor the profit and loss & whenever you want, you can simply exit your positions by selling your stocks. Selling your stock is also as easy as buying it.

So in today’s time investment in equity has become very easy. On the other hand, buying a house is still messy. You have to do whole lot of research on pricing, location, builder/developer and the broker. There is still no option of buying a house online. Then the amount of deal would be so big that in most of the cases, buyers depend upon home loan to complete the deal. Home loan process is also lengthier and lots of formalities are required to be completed. After purchasing the process, if you want to sell it, the process of selling it, is as tedious as buying a home. You have to search for the broker, give an ad and after negotiating the price with the customer, complete whole lot of formalities to complete the transaction.

So the question is which one is better? Investments in real estate or equity, for example say you have got fifty lac rupees and you want to invest them. In real life scenario, most people will prefer real estate in India because it is a big amount and investors will prefer to invest it where they expect more security. As per the common perception, investment in real estate is not only secure but also yields higher returns.

In the current market situation, it’s less about stock and more about company & sector if you are looking to invest in equity. Similarly in case of real estate investment, it is more about the price at which you have bought the property, its location and the developer’s brand value rather than any real estate property. And if you compare the investment in equity and real estate over same time zone, then you will realize that investment in equity is as good as real estate and investment in real estate is as risky as equity.

The biggest difference is the approach of an investor, when we invest in real estate, we hold it for longer duration whereas when we invest in equity, our approach is to sell it next morning and expect maximum gain on it. As economy is developing at a rapid rate, market has become extremely dynamic in nature. It is very important to analyses all the investment options available and the park you money accordingly rather than just following any existing practice, which may or may not be good for you.

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About akhilendra

Hi, I’m Akhilendra and I write about Business Analysis, Data Science, IT & Web. Join me on Twitter, Facebook & Google+

Comments

  1. As for now I personally feel real estate is the trending stream to gain lots of money. Though it is not early, you can make reasonable or unexpected profits when compared to that of equity.

  2. I did some surveys through web regarding real estate work and other businesses as well. I want to invest in real estate because my interest is in hotel business and for that indeed I need a suitable and budget friendly property deal. I read your post again and again, so, that all the information you have given in this could guide me further while finalizing my property deal for my hotel. If possible post more information regarding real estate investments.

  3. Awesome post! I am totally new to this field and even interested in opening my own hotel or resort. Well, your post is not just informative but, it is a boost for beginners to move ahead sensibly and with full confidence.

  4. Thank you so much! I have learned so much from your very informative post. This real estate investing knowledge can create a successful investor out of anybody.

  5. Great article! Personally choosing between real estate or equities is based on individuals preference. If you want on the safe side then choose real estate, properties are assets that continuously appreciating. If you bought a property this year then next year the value of your property can increase to 5-10% sometimes even higher depending on the location. If you want fast money and see how your money grow then invest in equities. The tricky part on equities is that it is hard to find a good company that can value your money.

  6. In my opinion, investment in real estate is much better than equity invetment because of low risk factor and more profit.

    • That’s right aman, but we also need to make sure that we make correct decision while investing in reality as there are lots of complication involved with real estate investments.

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