Advantages and Disadvantages of Investing in Real Estate

Advantages and Disadvantages of Investing in Real Estate

Simply earning and saving the money that you have earned is never enough. In order to make your money and assets grow it is imperative that you make smart and aware investments. Talking about investment, the choices available in the market happens to be many. However at the time of selecting them you must have your eyes and ears open and must be very careful before making any decision.

One of the choices that have been considered as one of the most serious choices for investment is landed or real estate property. This is considered to be one of the most effective choices when it comes to investment. However like all other options this one too has its own strengths and weaknesses. In the course of this discussion we will take a look at the advantages and disadvantages of investing in real estate.

Comparing real estate investment with shares

real estate market and stock market


There has been a class of people who have tried to understand that which of the two – real estate or shares, happens to be a better and a stronger option for investment. Here again it can be said that both the investment options have their drawbacks and positive aspects. Understanding the factors that helps the share prices to appreciate or fall down is not for all to understand. This is one of the aspects that include a number of economic developments, all of which must be understood and analyzed so that you can invest in the right place when it comes to shares.

As compared to that understanding landed estate is much easier. It is easier for an ordinary man to understand the factors that will help him to select one of the best possible real estate projects.

However investing in shares calls for a lower capital amount than investing in a real estate property. However real estate property acts as a hedge against inflation. The prices of such landed properties rise and fall with the rate of inflation. This is not the case with shares.

Comparing real estate investment with funds

Real Estate And Funds


The situation here is quite similar to that of the shares. In the context of mutual funds as well the buyer must understand a number of minute economic aspects that can help to appreciate or fall of the funds value. Further mutual funds are always subjected to market risk. This market risk is not all that high in the case of landed property. However the capital required for investing in real estate is higher than what is required for mutual and other types of funds.

Comparing real estate investment with gold

Comparing real estate investment with gold


Gold in India is considered to be one of the most flexible and lucky means of investment. It is synonymous with blessings of Goddess Laxmi. Hence Indian, especially women, have been interesting in investing in gold for a very long time now. In fact this is a trend which still happens to be in vogue.

However when you compare investing in gold as compared to investing in real estate property, it must be pointed out that the returns will vary to a huge extent when both the choices are compared. Gold price keeps fluctuating which means often the price for which you have bought the gold can come down. This will lead to a considerable amount of loss for the person who has just invested.

However this is not the case when it comes to landed property. In the cases of real estate properties their ROI have always been appreciative for as long as it can be remembered.

Comparing real estate investment with forex

Comparing real estate investment with forex investment


Once again forex investing is one of the technical aspects that require a lot of knowledge into the domain; hence this is not a domain for all. If you are beginning your investment plan for the very first time then you must begin with something a little less technical as real estate investment. Although the capital requirement happens to be a tad higher for real estate investment it poses much lesser risk for the investors.


advantages of investing in real estate


From the discussion so far it seems that the pros of investing in real estate happen to be many. This is probably one of the reasons why so many people across the nation have opted real estate property as one of the most suitable places where they can invest. However to take a better look at the advantages simply read one.




Easy to understand

That is in fact one of the main reasons why so many people think of real estate property to e one of the best places to invest. Understanding the pros and the cons of a property is rather easy and anyone can get a grasp of the matter in no time. Not much of technical knowledge is required for understanding the matter. Further you can garner a good amount of information from your friends, the internet and so on and take aware decisions.

Get a loan

Home Loan


It is true that for all kinds of other investment you can always take an informal loan or debt, however formal loans from banks and other financial institutions is only available for real estate property investments. This can come as a huge support for the investor and he or she can plan the investment as per their financial suitability. They can take the loan make the investment and then repay back the loan within their agreed stipulated time period.

Appreciative value

It has been observed that for most other investment options the value of the investment happen o go up and down along with the rate of inflation. However this is not the cases. Often when inflation is high landed properties experience an increase in their prices. This means safe profit margins for the investors.

Conclusive summation

However there are some disadvantages as well when talking about real estate property investment. It needs maintenance and also the liquidity factor might not be as high as for the other investment factors. However as compared to the advantages and the benefits of the landed estate investment the reasons why you should invest in real estate exceed the reasons of not doing so by a very fat margin.