When it comes to investing for the future, there are a plethora of options available. While all options help you to realise substantial tangible results, the choice of investment vehicle greatly influences your earning potential for the future.
Most strategic investment decisions rely on certain key factors namely: Investment capacity, investment horizon, investment objective, risk-bearing capacity etc. to name a few. However, the two investment options that are commonly considered are real estate and mutual funds.
Both these avenues bring their own set of benefits and risks that encourage or deter an investor from investing their funds in them.
Here are some key factors that you should consider when choosing between these investment options:
- Security and stability: If you have a low risk-bearing capacity, you would be better suited to invest in real estate markets as they are a stable investment when it comes to building wealth. Positive trends expected in the real estate market can help provide more stable returns in the future as compared to the volatility of mutual funds.
- Capital appreciation: Investments in real estate have a demonstrated history of providing appreciation over time. This is because as new projects are announced, they attract developments around them that boost the value of the property where they are built. Real estate also offers investors the opportunity to improve the resale value of their properties by enhancing the property with furnishings and modifications, or by renting out their properties. This provides a better wealth-building option through real estate.
- Control over investment: While purchasing a property with an investment objective, an investor can exercise greater control over the kind of returns they are expecting by carefully choosing the real estate property based on location, facilities, amenities, resale value of property and other factors. However, in the case of mutual fund investments, the investments are controlled entirely by the fund managers who invest with specific objectives in mind. This option of investing therefore offers lesser flexibility and control.
- Liquidity and flexibility: Both investment options vary in liquidity, as mutual funds are highly liquid thereby allowing investors to purchase and sell shares at market price. Real estate is often less liquid since selling property can take time and entails transaction expenses and market swings.
Additionally, real estate is a less flexible investment option as it requires hands-on management to deal with regular maintenance.
While making investment decisions involves a certain degree of financial acumen and risk-bearing capacity, getting started with investments is fairly straightforward once you are equipped with the right resources.
Joyville Homes has developed a variety of affordable homes that serve as a smart investment option for those looking to explore investment options in the real estate sector.
Visit www.joyvillehomes.com for more information.
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