Saturday 27 October 2012

Does buying real estate make sense?

Real estate is an asset that carries considerable real time value. It’s not just the returns that you can generate by selling it but really the primary support factor of shelter and living. Does buying real estate really make sense now? Well, I think it does make a lot of logic to invest into real estate at any period of time. Just have a look at the way our economy has progressed in the past 50 years or so.

Real estate carries a lot of intrinsic value. You can buy stocks, you can put in secure funds but when it comes to the king of all investments it has to be real estate. Something, I bought 30 years ago is now worth 50 times in value. Would you say the same thing for a stock market investment? Probably not!! Also, the fear of investing in stock market is much more because of the inability to digest notional losses.

Let me ask you a simple question. If you have $100,000 then would you invest in Stocks or in Real estate?

You can say none if you are very pessimistic on the performance of both. But think of it holistically, Real estate will give the best possible returns and you even have the luxury of renting your apartment or living in your house yourself. So, where’s the risk? Assume you are looking at a time span of 20 years. Do you really think real estate might turn out as negative investment? You must be kidding!! Stocks might turn out that way but real estate will never be on the downside.

The foremost factor to realise here is the necessity of people. The requirements of a normal man keep on growing. With the growing population and rising requirements, real estate has to be at a premium. Map to the average rate of inflation and the growing prices of construction raw materials. With real estate you will grow more than inflation for sure.

If you really want to take any risk then take it in something that you know is worthwhile. Invest in real estate now else it would be too late and you don’t really want to miss the bus. Do you?

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