Investing in Land vs. Stock Market
As we work tirelessly towards our goals in life and save for our future and that of our family it is absolutely essential that we choose smart investment options to make our money work for us. Now comes the question of what is a smart and safe investment? Here we compare two commonly chosen investment options and address this question based on a few important factors –
Parameters |
Real Estate Investment |
Investment in Stock |
Investment Goals |
One has to prioritize their investment goals to decide on their choice of investment. Is it regular income, capital appreciation, or diversification, Tax planning, etc. With property investment one enjoys Regular rental income, benefits on EMI, interest, depreciation available with property, and capital appreciation in medium to long tenure. | With stock investments it is mostly capital gains over the planned investment tenure and this expected return is also susceptible to market risks. |
Safety of Investment & Risks |
A real estate investment in a growing & developing locality in a RERA certified project from a reputed RERA certified developer is a safe investment. Without the concerns of the market volatility similar to that of the stock market, the investor can be assured of the safety of the investment | Investment in the stock market is prone to risks due to the volatility of the market which is influenced by many factors such as government policies, countries financial growth, the national and global political scenarios, threat of wars, etc. |
Ease of Investment |
Investment in real estate has become easy and transparent due to the many norms and regulations of RERA. Compliance to the design norms, delivery deadlines and adherence to the regulations has been reinforced making property investment very buyer-friendly. Once the budget, location and requirements from the property are fixed the process of property selection becomes easy especially with Technology as most of the reputed developers have exclusive project sites that provide comprehensive details of the property. | Stock investments are quite tricky especially for the first timers who venture into the market. Selecting the right stock & the perfect investment period, fixing the right investment bucket are quite challenging and there are no fixed static rules for these as market trend and performance always keep changing. Though there are many investment advisors in the market, selecting the right stock, the entry and the exit time, which stock to select – Small Cap, Mid Cap, or Large-Cap stocks and how much, whether to go for low-risk stock, blue-chip stock or beta-stock, all this comes only with good experience and after facing some ups and downs in the market. |
Return on Investment |
Real estate has always been considered a safe and well-yielding investment in the long tenure. However, properties in highly-developing pockets of the city like those along the OMR stretch of Padur, Siruseri, and in IT hubs close to Porur have shown very good asset appreciation in short terms also and yield excellent rental income as there is always good demand for residential properties near IT hubs. So there are regular returns in the form of rent and on the sale of assets. | As mentioned earlier the return on investment on Stock is unpredictable and requires a lot of monitoring to study the performance of the company, the market fluctuations, and the global financial scenario. All these factors affect the performance of the stock. Some stocks like those of Large-cap stocks have market immunity and investors reap benefits over the long term, however, if one invests in small-cap firms with the intent of quick good returns there is a lot of risk involved in it. |
Time commitment |
Investment in real estate is less time-consuming and does not require constant follow-up and monitoring. One has to spend time to inquire, study the market and choose the right property, do its interiors and furnish it according to their desire, this is a one-time affair. If the house is given on rent, finding the right party and property maintenance during change of parties are events that happen once in a few years and there are property maintenance firms that provide this service. | To monitor the stock market and take appropriate actions one should be willing to dedicate time to managing a portfolio and the shares they own on a daily basis. Investing time on a regular basis is an absolute requirement when it comes to managing investment in stock. |
To reap a good return on investment in real estate one has to study the market and select the right locality with good growth potential and a dependable developer with market goodwill and record, once this task is completed one earns a dependable and stable asset for a lifetime. However, investment in stock requires market study, constant monitoring, and swift action to ensure good returns, and the market risks and volatility are always a part of this investment. Investment in stocks are prone to have peaks and valleys, which makes them a riskier investment.