Real Estate and Share market both are good investment tool, however, there is a lot of difference in these investments. Today we will talk about all those investment differences and then decide on which one is better.
Tenure of Investment
Tenure of the investment is an important aspect while investing. Real Estate investment is a long-term investment where you need to hold your investment till the time there is a good rise in the market prices. When it comes to the sharing market as well the tenure is usually long reason being you need to wait for the correct time to exit out of your investment. However, the duration of the share market will be lesser than the real estate investment.
Size of Investment
The size of investment basically means the amount of lumpsum money required for investment. The value of real estate products is much higher in comparison to share market investment. So, when you want to invest in real estate you need a large sum of money to invest whereas in Share Market the investment size will be very low.
Risk of Loss
Risk of losing the capital is the most important factor of any investment, before analyzing it one should not be investing. The risk of loss in Real Estate is very low as compared to the share market. Share market is more volatile and the chances of losing your capital are very high. It makes Share Market investment much riskier. Moreover, if there is a slowdown in the real estate market you can hold your investment till the corrections happen in the price of the property. But this is not the case with share market investment, even you hold them for the long term it is not sure that your investment will grow. As the share market does not depend only on overall market performance but also the performance of the company you have invested in.
Ease of investment
If we talk about the process of investment in both these tools, usually people think Real Estate follows a lengthy process of paperwork in comparison to share market investment, however it is partially true. Real Estate investment usually takes more time in paperwork in comparison with share market investments. But still while investing in the share market you need to do a lot of research about the market about the company before making any investment decision. However, in real estate investments, the majority of things get clear once you visit the property. So, in this matter also, real estate will be an easier investment than the share market.
When it comes to liquidity here share market has an edge over the real estate investment. In Real estate investment, you need to find the right set of buyers who can afford your property and has that much of paying capacity. However, in the case of the share market, you can easily sell your shares online as well. Although these days you get an option to list your property online, that only helps in finding a buyer not a surety about the sale.
Basis the above discussion we can say that Real Estate has an edge overall in comparison to share market. The only edge which share market has about the liquidity. But as an investor, you can overlook that just because of the reason you are planning your investment for the long run hence your horizon is of 10-12 years in that time frame you will be able to find quite easily. So in long-run real estate will yield more returns in comparison to share market where the risk is high.