Search

What Makes Real Estate the Best Long-Term Investment?

Don’t wait to buy real estate, buy real estate and wait!



The shutdown of the global economy is something the world has never seen before. Experts say we are headed towards a recession or maybe a depression that lasts several years, which calls for making your long term investment in the best manner possible.

As a long term investment, there are a lot of options like equity, mutual funds, gold, fixed deposits, government bonds, real estate, etc. However, a majority of these options have lost their values significantly as they have been hit badly by the lockdown and lost the faith of the investors to a great extent. This calls for an analysis of various investment options and what makes real estate the best amidst them.


Real Estate v/s Equity:

Equity is considered one of the riskiest investment options because of the volatility of the share market. There is no doubt that equity has earned great returns for investors around the world. However, markets throughout global economies have crashed from time to time which is a bad situation for the investors. Whereas, real estate is one of the safest investments as the volatility is less and there is no effect on the property prices.


There is a risk of losing all your money in equity as we have seen major companies getting shut affecting millions of shareholders. On the other hand, real estate investment will grow its value over the years, and at the same time, you can earn rental yield from such investment.


Real Estate v/s Fixed Deposits:

Fixed deposits have been a preferred long term investment for large masses in India owing to the fact that it gives you fixed returns which are higher than the normal bank savings account and it’s safe. On the other hand, if we see global real estate prices, the appreciation has been much above fixed deposits and at the same time, it’s a safe investment as well.

There’s a lock-in period in case of fixed deposits and you can withdraw your investment only post such period if you want to earn complete interest amount. However, in case of real estate investment, you have the liberty of selling off your property whenever you wish to and you can invest the earnings in some other property to get tax benefits as well.


Real Estate v/s Gold:

When it comes to long term investment options, people have always backed investing in gold as the returns over the years have been hefty and it’s one of the highly liquid asset classes that can be sold at ease. Gold investment is considered safe, but here the prices are highly fluctuating which might result in providing negative returns in your portfolio.

Real Estate on the other hand is a safer investment as we’ve hardly seen property prices decreasing over the years. Real estate provides a great return on investment if your property is located in a preferred locality with growing demand. Especially in growing metropolitan cities like Bangalore, the returns are commendable.


Real Estate v/s Mutual Funds:

In recent times, mutual funds have become a preferred long term investment option for a lot of investors in India. The returns are lower than equity stocks but higher than bank fixed deposits. However, mutual funds are also subject to equity market risks and it can’t be assured that you will get high returns on your investment.

Whereas, real estate investment is one of the safest investments with higher returns and there is not much effect of market conditions as the property prices will keep on appreciating over the years to come.