A real estate agent will always tell you that, property is the best thing to invest in. A stockbroker will tell you that mutual funds are the easy way to secure your money. Both of them have convincing arguments telling you that their respective fields are the best to invest in. However, the bottom line is, both kind of investments have their advantages & disadvantages. In this blog post, we will discuss five broad categories that you can use to compare these two investment options.
Returns on Investment: Mutual funds have many different aspects that you can invest in, like open ended, closed ended, equity, fixed maturity etc. In Real Estate In Hyderabad, there are two types of properties: residential and commercial; other types of real estate such as malls, office buildings and single-family homes etc. fall under these two categories. While this might depend on the kind of Mutual funds you invest in but in general Mutual funds can guarantee an ROI in a fixed range (10-15%) over a few years of time. On the other hand ROI on real estate can be much higher but again over a longer period of time; ROI in real estate investments can also be a little difficult to calculate as it depends on a number of varied factors.
Management: Managing a mutual fund is easy as there would be nothing much to manage. However, managing a property is not an easy task. Calls in the middle of the night complaining that something is broken and/or irregularities in the electricity bill etc. are a common thing when it comes to Commercial Property In Hyderabad management.
Liquidity: The best thing about mutual funds is that you can sell it whenever you please. It will only take a few days for the funds to reach your account. Similar is not the case with real estate. It would take a good 2-3 months for any deal to close in peak selling season, 6-7 months in others. Mutual funds are synonymous with liquidity (easy to dispense); real estate properties are not.
Liability: No one is going to get hurt thanks to your mutual fund. However, the possibility of someone getting hurt through your property is high. You will be responsible for all of them. Leakage on the roof, walls chipping off, wobbly staircase etc. are all your responsibility. You will have to shell out extra to repair and maintain the house.
Leverage: The advantage of investing in mutual funds is that for every rupee that you spend, you will get it back. However, investing in real estate is more of a gamble, there is a level of uncertainty. For every five rupees that you invest, you could be 7-8 rupees or 2-3 rupees. Based on this uncertainty, many people tend to invest in mutual funds.
Mutual funds might seem to be the best bet after reading the above-mentioned points. However, mutual funds and stocks tend to be volatile when the company or the economy takes a hit. Mutual funds are usually an emotional investment. If you do invest in stocks, it is possible for you to go bankrupt. What do you think about this blog post? Share your suggestions, feedback and thoughts on this post by commenting below.
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