Monday, 1 May 2017

Should we invest in real estate or stock?


These days, there are two general areas where most investments by individuals and targeted at, namely, real estate and stocks. For quite some time, the global financial industry and investment experts have been monitoring the growth of investments placed into the two. Both stock prices and also the real estate prices are priced to sell. Most financial analysts agree that now is the perfect time to buy. But many disagree with what investment is best. There are many investors especially in Malaysia who are raving about their placements into either properties or shares. The wise would usually invest in both. But for people with limitations, only one has to be chosen. So which one should you prefer, investments in real estate or investments in stocks?

Real estate investment

Since time immemorial, people have been buying land, houses or just about any real estate asset for the purpose of investing the money for a good profit or investment return. It is very rare that people buy a property, for example, to keep it forever or make it a part of the family property. Often, investors buy properties to divest or sell that property in the future, at much higher prices.

That is the main reason why the global real estate industry has been actively thriving especially when we look into Malaysia property market. There have been too many investors who are placing money on real estate, particularly on new developments. That is because while lands are still undeveloped, they tend to be priced cheaper. As soon as development takes place, or the land is converted into a commercial or residential complex, it is very logical and usual that prices of the real estate in the area would normally hike. Thus, this is the simple and uncomplicated rationale and principle behind real estate investments.

Experts and property investors attest that investments in the real estate almost always bring about hefty and enticing investment returns. There is no wonder that the real estate industry globally has rapidly and robustly boomed into a giant industry, where investments easily flock. No wonder, real estate developments also abound.

Before someone invests in real estate, he or should know all the dos and also don'ts of it. Just like in any other investors market this also has its of ups and downs. It is true that people who own properties have faced troubled times, but this does not happen to someone who has good knowledge of investing. Sometimes problems arise because the person becomes emotionally attached to the property and thus loses out on lucrative returns.

The truth behind being a successful investor is by treating it as something that is bound to prosper. Just like any other invest; real estate also needs to have a well-defined strategic plan and the vision to succeed. By doing this, you can also join the ranks of multi-millionaires. Besides creating immense wealth, having more than one place to call home, there are many more advantages of investing in estate business. Mentioned below are some benefits that a novice investor must be aware of:

Investments are Safe: The value of the real estate increases over a period and that too without much volatility. Though there may be crises like circumstances in some parts of the country for some period. Indicators constantly show that prices will always be inflated and even when here is a drop in the price it is bound to rise again. This is in contradiction to the stock market that is always on a roller coaster. Contrary to the stock market, the value of investments in real estate always increases. Therefore, investing in it can be called a safe investment.

Anybody can do it: Some so many amateur investors are venturing in the field of real estate every day. Many seminars are being about real estate investment, and the bookstores also have many do-it-yourself books on this topic. They give tips about investing and how to make profits from it. But, as said it is impossible to make profits overnight. The key to prosperity is constant learning and learning from the mistakes made.

The Power to leverage: Some investors can make profits by making deals immediately. Some of them hold the property for some time so that they can earn more profits. The lenders allow the owner of the property of borrow up to eighty percent of the value of a property which is occupied by tenants and ninety percent on those occupied by the owners themselves. This allows you to buy property with minimum investment.

Tax: There are many tax breaks set up for the real estate investors. Though they usually fluctuate from state to state, they do provide tax benefits. But, one should note that the property purchased should be in the economic sense rather than for tax benefits.

Stock market investment

For investors who do not have much patience and perseverance to wait longer for possible investment returns, stock market investments are most ideal. That is because equities are very transparent and are at times excitingly unpredictable.

Companies list their shares to gain capital infusion from investments of shareholders. Thus, through such listings and stock investments, investors are made to own a part of the company. When the firm booms, of course, its shares rise, and the valuation of the shares owned by investors also shoot up. This is the basic principle behind the usual stock market and shares investment transactions.

Stock investments are volatile and are very exciting at times. That is because it is possible that overnight, share prices can shoot up significantly or even uncontrollably. Likewise, share prices can drop profusely overnight or even in a few hours, depending on what are transpiring in the market or any news about the company. There are a lot of other underlying risks accompanying stock investment as mentioned by Investopedia. Thus, stock investments are not for the faint at heart.

Stock prices have fallen, and even the most stable stocks appear to be unstable in this volatile stock market. Is there anything like a safe stock any longer? Although the stock market has its ups and downs and has had them for over 80 years, no one wants to take a bath when it comes to the stock purchase. Depending on which economist you listen to, you may believe that more doom and gloom is coming.

Stocks have always been a good long term investment. And anyone can purchase them. You do not need to have good credit to open up an account with a stock firm, just money. You can pay for the stock and include it in your portfolio. There is no need for credit repair when you are seeking a way to buy stock for a long term investment.

Real estate is a different type of long term investment and one that some financial advisors recommend over stocks. The advantage of real estate is that it is something people can use. Financial advisors are saying that with the mortgage rates so low and the housing prices also at rock bottom, now is the high time to buy. Although it is not that very easy for someone to get a mortgage. To qualify for a mortgage today, a person needs to have stellar credit.

If you are thinking of investing in stock or real estate, consider your credit. You should diversify your portfolio and invest in both. If your credit is bad and will preempt you from obtaining a mortgage, you may wish to use a credit repair aid to assist resolve your credit problems. Credit repair can pave the way for you to obtain a mortgage and take advantage of the low prices in real estate.

Economists all agree that any investment portfolio should be diversified. Investing in both stocks and real estate right now is a good idea. You can buy low and, when the price jumps, sell. Judging from history, prices are bound to rise so that you may make a good long-term as well as short-term investment.

2 comments:

  1. PILIH PELABURAN YG SELAMAT...

    ReplyDelete
  2. With just a small capital you can invest in stocks and shares unlike in property investment. Only that we must remember the mantra buy low sell high.

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