Real Estate Investments vs Alternative Investments: Where to INVEST

The main motive of investing is to generate cash. People invest for various
purposes. Some do it to make a living, while others invest to save money for
retirement. For those unfamiliar with investing, it can be difficult to understand. It
is mandatory to understand first which would be better for you, as an investment
is a big deal and investors will get their answers here so they can make decisions
about where their hard-earned capital will be allocated.
Every investor has a niche that they focus on and understand. There are many
different fields investors can use to make money like traditional/ alternative
investments or real estate investments. The traditional/alternative investments
include stocks and bonds, gold, art and collectibles, currencies, etc., and real
estate investments include all types of investments like buying and selling of
residential and commercial properties, taking properties on a lease, etc.
The contrast between real estate and stock market investment is the cash flow.
Rental properties put cash in the proprietor’s pocket every month while stocks
possibly put cash in the proprietor’s pocket when they are sold.
However, we should engage the contention and check the numbers out. Over the
past 10 years, real estate has beaten the Stock market. Over the past 5 years,
the Stock market has returned 23% more than Real Estate. In the previous year,
Real Estate has beaten the Stock market by 4%.
Both are great ways of investing money for solid and consistent ROI if invested
responsibly. For a greater output, the investors prefer asset-based investments
like real estate. Because of the benefits that real estate investing offers, investors
use real estate to grow and diversify their portfolios.
Real Estate Investments VS Alternative Investments: Advantages and
disadvantages.
There are advantages and disadvantages of investing in these types of real
estate assets, and how to invest in them differs from traditional/alternative
investments.

Advantages of Real Estate Investments

1. Tax Advantages: Real estate investors are highly favored by Tax laws.
There are a lot of tax deductions available for real estate property owners
including property tax, real estate interests, mortgage interests, repairs and
maintenance, and upkeep. To combat inflation one can even depreciate
their rental properties over time.
2. Leverage with other people’s money: One of the greatest parts of
investing in real estate is that one can use others’ money to invest. In real
estate, one can purchase an asset with only 20% of the funds, which is not
possible in stock markets. For investment in stocks, one has to fully invest
their funds.
3. Fewer Fluctuations: Real estate investments generally don’t fluctuate
with the stock markets, so they are usually not affected by market
conditions. They are often considered a good way to diversify your
portfolio.
4. Diversify your Portfolio: Real Estate investments have a low correlation
to the stock markets; they help to diversify their portfolio. By investing in
real estate funds one will have access to markets that one wouldn’t have
had access to before.
Disadvantages of Real Estate Investments
1. Bad Locations: The community and the comparable properties in that
area of your property have a huge impact on its value.
2. Maintenance and Upkeep: Some of the properties come with underlying
issues that could be expensive.
3. Potential Vacancies: Vacancies over one month or more, costing
property owners to pay from their pockets.
4. Structural Risk: A property depends on the foundation to hold up.
Structural damage can cost real estate investors.
Risks of investing in Alternative Investments :
1. Equity Risk: The market price of the stock fluctuates all the time
depending on supply and demand. There is always a risk in this niche that
applies to investing in shares.
2. Volatility: Higher stock price volatility often means higher risk and helps
an investor estimate the fluctuations that may happen in the future.

3. Capital Gains Tax: Any profit or gain arising from stock market
investments is known as a capital gain. Short-term capital gain tax is taxed
at a 15% rate and long-term capital gain is taxed at a 10% rate
respectively.
According to Mr. Vineet Chellani, Founder of Asset Deals, “Deciding where to
invest your money can be an overwhelming process. It’s a huge decision that will
impact the rest of your life. Don’t decide on your own, get a second opinion. He
also added “Real estate investments are wise speculation chances to acquire
ordinary pay as they offer high rental rates contrasted with alternative
investments. Anyway, rental pay and cost appreciation relies upon many factors,
for example, current market patterns, area, and social and physical infrastructure.
These are the game changers for real estate investors to appreciate.”