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Today, It is really a big question in front of many people when it comes to Investing money – Real Estate vs Stocks?.

Due to the Internet revolution and rising purchasing power, more and more people are looking to take part in such Investment opportunities .It is evident that a careful and planned approach to financial investment can fetch you a good ROI.

But, There are some who believe that the stock market is a bit safer than real estate. What do you think?

Investing in real estate is always a risk, at the same time it also gives long term and big returns and some investors will argue that the stock market has a higher level of security. There are always case-by-case reasons to choose one over the other.

Checkout – Real Estate Growth Rate for Jaipur

So, you really have to analyze these two investment options very carefully before making any decision. Take note of what could potentially be on the other side as well and weigh your options consciously when considering which would be more suitable for you.

This article will take a look at the pros and cons of owning real estate vs investing in the stock market.

Differences between Stock and Real Estate

Why invest in Real estate

Let us see multiple reasons that make real estate really a good option to invest your money.

Here below are some considerations for you to think about when investing in real estate:

• If you buy a property and enter on a fixed rate mortgage, the repayments should be less each month than the rent.
• There is less risk of rising interest rates with rental income.
• You won’t need to worry about your tenants terminating their lease or moving out, as they can’t walk away from their rent payments.
• Buying a property and renting it out can act as an investment that appreciates in value over time. This increases your gaining potential and provides security at no extra cost during normal market conditions.
• Your investment can grow with no extra effort.
• If you are a saver, this is a good way to invest your savings to provide security for the future.
•  If you have a comfortable income, this is still a good investment opportunity as the tax relief on mortgage interest is better.
• Some people choose to rent out an entire property while they still own one they are renting out just so that they can get access to rental income tax relief. Using this type of property portfolio means that you don’t have any expenses which need paying and because it’s not giving up your main residence you can use your home as a weekend/holiday home.
• Many people decide to rent out their main property and buy a holiday home to use when they want to visit family or friends.
• Having a holiday home can be a good way of having an income on standby if you can’t work due to sickness or disability.
•  If you invest in property now, it’s unlikely that the market will fall any lower for many years as there are not enough properties for sale. At present, the only way that property falls in value is if people need to move into smaller homes, i.e. for environmental reasons or because of high house prices.

Also Read – Investment in Luxury properties can be a great choice if chosen wisely

•  If you invest in property and prices drop, you can still rent the property out to cover your mortgage (unless you are in negative equity).
• There is no need to worry about repairs or replacements with a rental property.
• You could use your rental income to provide an income for later retirement, as inflation may make it harder to buy food and fuel at this time. Property prices may have increased slightly by this time, providing a little more security.

Why invest in the Stock market

Some considerations for you to think about when investing in the stock market:

• Speculation
• Income
• Buy low, sell high   Improve your skills and knowledge in an ever-evolving economy
• Grow your wealth at compounding interest rate market
• A risk/reward investment strategy that is fun, not just boring and tiresomely predictable  For the individual investor
• A chance for you to be a part of global, technological, social change market leading change at a faster pace than you could ever do on your own
• Find success in unpredictable global markets with cash management skills and capital allocation strategy
• Commissions, fees and expenses that are being reduced as the markets grow and becomes a lot more competitive
• A highly educated and competent group of experts in the field who are your allies When you want to know what is going on (stock market news)
• International exposure to every corner of the globe – trading around the clock 24/7
• A chance to learn about Human nature of the crowd in market movements
• Speculation, the potential for the stock market to go up is much greater than it is to go down, although from your perspective, people tend to make more money on the way down than on the way up (when they panic sell)
• Trading and investing begins at home and with a small amount of capital

Risk of Investment in Real Estate

When it comes to investment, the real estate market is the most appealing. This is why a big number of people are buying real estate as an investment these days. Well, it’s a good way to put your hard-earned money to work.

However, just like any other investment, this one comes with its own set of hazards. Whether you are a first-time buyer or a seasoned pro, It is critical to analyze all risk considerations before making a final decision. Here are some risks involved in investment real estate:

• Unstable Economy: The real estate market is affected by how well the economy performs. If the economy is doing poorly, many people will not be able to afford to go to work and so will lose their jobs. This will result in a weaker real estate market since fewer people can afford houses.
• Difficult to Track and Predict: One of the main risks with investing in real estate is that it is difficult to track, which makes it hard to predict what types of returns you will get from your investment. This can make it hard to know how much risk you are taking on.
• Lacks liquidity: The two main assets that are used to buy homes are cash and liquid assets, such as stock shares or bonds. With real estate, which is still a good investment, these other investments are not readily available. This makes it difficult to acquire the asset without selling something else first.
• Absence of diversification: This means that you need all your money in real estate to get the full benefit of your investment. If you have several investments, then even if one goes down in value drastically, you will still have some money left over for other investments and so your total portfolio will be less affected.

Risks in Stocks

It’s critical to understand the hot waters in the stock market and set boundaries while investing. You should also keep in mind that while you may gain, you may also lose. Among the primary dangers to be aware of are:

• Company going bankrupt and losing all your money
• Stock market crash
• Market timing (buying high and selling low)
• Day trading may sound like the fastest way to make quick money, but it is actually one of the riskiest ways to invest in the stock market. Besides, many novice traders lose money on trading commissions and taxes. It’s preferable to buy stocks that are set for long-term growth and sell them when they start experiencing growth spurts or at least minimize your losses by being a long term investor.
• Loss due to salary cuts
• Loss due to demotions, layoffs, and retrenchment
• Loss of property value due to the economic recession
• Loss of money owing to poor financial management on your part.

Investing in the stock market does not mean that you can afford to waste all your time playing games. It is also important for you not to let your emotions take over. It is always advisable for individuals from various walks of life to perform their financial budget so as not to go overboard on any one aspect of their financial activities.

Also, it is important for them to plan their expenses well so that they do not get overwhelmed by sudden urges that may push them into overspending.

• Loss due to interest rate differential
• Loss due to poor job performance.

There are other factors why some individuals are poorer than others. Be that as it may, there are still some individuals who do not do anything right in life, whether it is their job, their family relationship, or even the financial aspect of their life.

Both real estate and the stock market, like any other investment, have advantages and disadvantages that you should be aware of. We hope you find this article helpful as you plan your next purchase!

Manglam Radiance is a premium luxury residential project located near Tonk road, Jaipur. It offers 2/3/4/5 BHK luxury apartments in the heart of Jaipur City.

We truly believe in holistic living. So Manglam Radiance has all the modern amenities like mini-theater, Lord Ram Mandir, infinity pool, Double-height badminton court, all-weather pool, a theme garden, kids play area, steam & sauna, and a gymnasium and much more.

If you are looking to invest in the real estate market in Jaipur. We are one of the best options to check out. Submit your query or Contact us and Schedule your visit today.