Gold Investment Vs Real Estate

Gold Investment Vs Real Estate

When it comes to investing our money we all wonder where to invest and which invest type would be best. Generally, most of us get confused between real estate and gold investment. Gold investment is a traditional Indian investment as we from ancient times have been inclined towards gold. But with increasing fluctuations in the market, a new alternative for investing has emerged out in the form of real estate investment.


The differences

Difference between gold investment and real estate investment can be seen from the following points:

  • Size of the investment: the real estate investment is relatively large and huge in size and requires a large capital for investment. While the investment of gold is relatively small; you can start from a small investment of maybe just 1 or 2 grams. It completely depends on the capital you want to invest.
  • Tenure: real estate investment is usually a long term investment while gold investment is can be both short term and long term.
  • Volatility: the real estate when compared to gold is considered to be of low volatility because the value of gold changes almost every day while the value of real estate change over the long term.
  • Liquidity: real estate investment is not easy to liquidate as selling off one’s property requires a lot of time and involves a lot of processes. While gold is a very liquid asset as buying and selling of gold is relatively a simple process and it can be converted into cash without any process
  • Earning potential: real estate is said to poses high earning potential when compared with gold as it can generate regular monthly income in the form of rent. While returns of gold fluctuate with ups and downs in the market.
  • Tax: real estate gives integrated tax benefits while gold attracts a lot of capital gain tax.

These were some of the main differences between the two investments.


What to keep in mind while investing?

Generally, the type of investment you wish to do is dependent on the available capital or the capital you wish to invest. If you wish to invest a small amount than gold is better while real estate needs a large capital. Also, if we talk about economic impacts real estate is considered to be good for economic growth while it is said that investment in gold may lead to an adverse effect on the economy.

Past prices and future expectations are also considered while investing your capital. Generally, gold possesses transparency in terms of prices as past records are available and future price can also be expected to approx. While real estate lack in terms of transparency of price as most of the time the past prices are not available.

Another factor which can also be seen is that the value of the real estate or property can be increased through renovations or some changes in the design and interior of it. In nutshell, the property can be changed or renovated as per your convenience but this facility is not available in gold. Also, the return offered by real estate is high while in the case of gold they are usually nominal.

There are many aspects where gold overshadows real estate. Like real estate requires maintenance but there is no maintenance required while keeping gold. We can keep a large amount of money in the form of gold in our homes without much maintenance or carrying-cost. Also, gold is more liquid than real estate and can be easily carried anywhere and sold in a shorter time, unlike the real estate.

Overall we can say that both real estate and gold have their pros and cons. the decision is wholly to be made by the investor based on his criteria or needs for investing. There should be a rational choice while doing the investment.


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