August 15, 2018
Aqeel Karim Dhedhi’s Annual Cattle Show and His Love for Cows
The Bakra-e-Eid season is here and is in full swinCONTINUE READING
“Which is a better investment? Real estate or stocks?” This question is like asking whether chocolate or vanilla is superior. There really isn’t an answer because a lot of it comes down to your personality, preferences, style, and the specifics of the individual investment. Which is why we are listing the pros and cons of investing in the real estate market so you could decide whether to invest or not.
Compared to other investment markets, real estate takes a lot of hands-on work. You have to deal with the midnight phone calls related to paper-work, gas leaks, sewage problems, and a whole list of things that you never even considered. Even if you hire a real estate agent to take care of your real estate investments, you still have to show up in a few meetings.
Real estate costs you money even if space is not occupied because you have to pay taxes, utility bills, and more. This means that you could actually have to come up with money each month!.
The actual value of real estate hardly ever increases in inflation-adjusted terms. This is made up for by the power of leverage. Imagine buying a $500,000 property by putting in $90,000 of your own money, and loaning the rest from a bank. If inflation goes up 3% and now each dollar is worth less, then the house would go up in value. The actual value of your house hasn’t changed, just the number of dollars it takes to buy it. This can give you a 15% return. Backing out the 3% inflation, that’s 12% in real gains before factoring in the costs of owning the property. That is what makes real estate so attractive.
You will see a lot of real estate companies boasting about the benefits of investing in land. They degrade the stock market investment which is pretty much justified in case