Investing in mutual funds or real estate, what would be beneficial for the long term?

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When done the right way and with the right brand, investing in real estate can provide great returns with factors like rental income, tax benefits and capital appreciation gained with time.

Investing in real estate takes discipline. From finding the right property to saving up for a down payment, a real estate investment may seem like a gargantuan task. When compared, investing in stocks and mutual funds may seem like an easier deal. But, the truth is far from it. Investing in real estate offers unique advantages over mutual funds that make it the better option.

Here are 5 advantages of investing in property offer over mutual funds:

  1. Real estate is a hedge against inflation: Real estate or mutual funds, your investment should earn you returns that you can save or reinvest. Real estate investments can earn you rental income that keeps pace with inflation as rents for properties increase with the rise in the cost of living. Mutual funds and stock markets are not affected by inflation or changing market conditions and are at a disadvantage when it comes to monthly yields.

  2. You don’t need expertise to invest in a good property: The norm in the stock market is to buy low and sell high but it takes years of practice and training to master the trade to make profits. But in the case of real estate, you only invest in a property after thoroughly knowing about its location, size, features, amenities and other factors. Investing in a home is a transparent affair that cannot be disputed.

  3. Better returns and lower risk: Individual investors trading in the stock market are prone to emotional buys and panic selling that bring them losses. Real estate is almost immune to emotional buying and selling and is a safer bet for individual investors. Your real estate investment is based on aspects that hold up through ups and downs in the economy. For instance, investing in a home in a prime locality will remain an appreciating asset no matter what changes the market goes through. There’s nothing more profitable than a long-term real estate investment, unlike stock markets where the only stable thing is the risk involved.

  4. Real estate investments provide unique tax advantages: From tax exemption on home loans to exemptions on a long-term capital gain, real estate investment come with a number of tax benefits. Tax exemptions can also be availed on a second property and commercial property bought for the purpose of renting. Mutual funds and stock markets offer no such advantages.

    Your real estate investment provides you monthly cash flow (in case of commercial or second property) and saves you thousands of rupees on rent every month. Residential properties go up in value always providing capital appreciation. With real estate, you have control over your asset with opportunities to buy and sell as you wish.

    With all this said, the most important aspect of owning a property is the value it adds to your life. Your home is the gift you give your family and to yourself for a lifetime. It is permanent and becomes a part of your family that you can cherish forever. Make an informed decision and invest in your property soon.

Looking for homes in Mumbai? Presenting Valeria, an ongoing project of 1 and 2 BHK flats in Mulund East. Invest in Valeria and enjoy all the advantages of owning a home.


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