Gold and Real Estate
There are many options available in the market to invest your money. But these days there is a lot of discussion about investing in gold and real estate. Both gold and real estate are considered traditional investment options. Gold can be bought and sold instantly, which provides stability to the portfolio. Real estate gives better returns in the long run, but buying and selling property takes a lot of documentation and time. The question is which option can give more profits? Let us tell you in detail about both the investment options in this news.
Benefits of investing in gold
The biggest feature of gold is that it helps in protecting from losses in volatile situations like stock market. Investing in gold is possible even with small amounts. It can be easily converted into cash if needed. With the advent of options like SGB, the problem of keeping it safe has ended. Investment in Gold ETF can also be done through Demat account.
No regular income from gold
The drawback of gold is that it does not generate any regular income. Returns are available only when prices rise. Physical gold has to be kept safe. There is a nominal fee for investing in Gold ETFs. Whereas when investing in SGB, the money remains locked for a few years.
Two types of income from real estate
Profit from property comes from two sources. Rental income and increasing property value over time. If you hold the property for 810 years, there is a possibility of getting good returns. Buying a house has become easier with the facility of home loan. After a few years, the rising rent automatically covers a major part of the EMI. Once the loan is repaid, the property becomes completely in your name.
Low liquidity in real estate
It is difficult to convert property into cash immediately. It may take time to sell and the price is decided according to the local market. Apart from this, expenses like maintenance, society charges, repairs and property tax also have to be added.
What is better to invest in?
If your priority is liquidity, then gold is a better option. Real estate is suitable for long term returns and asset building. When taking a home loan, EMI has to be paid regularly, whereas in gold there is no such obligation. Experts believe that the EMI burden remains for the first few years, but the increasing rent with time balances it to a great extent.