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Why do people choose real estate to invest their money?

Updated: Feb 1

Investment is one of the oldest terms in finance to secure your future or plan your future expenses through investing money in multiple options. Read this blog carefully it will help you to understand the current investment options so that you can choose a safe investment option with high returns and also understand why do people choose real estate as a safe investment option?


Currently, we have multiple options to invest your money like fixed deposit, purchasing gold, real estate, stock investment, mutual funds, government bonds, etc. If we talk about the above-given investment options, they all have pros and cons like low-risk & low return, medium risk & medium return, high risk & high return, etc.


Fixed Deposit & Government Bonds: Fixed Deposit is an investment option with low risk & low return. Basically, you deposit a fixed amount in your bank for long tenure & the bank gives a rate of interest on this amount that is higher than your saving account interest after completing the tenure period. Things to be remembered are “Longer the tenure of FD then higher your return” All banks offer different rates of interest on FD.

Government bonds mean you give your money to the government so they can use this money to run the nation and after a period of time they will give you the amount with a high rate of interest which is higher than any FD interest. The longer the tenure of your bond with government more will be your returns on your money. These two investment options are low risk & low return options available in the market.


Stocks & Mutual Funds: Stocks and mutual funds, both are high-risk options of investment that give you high returns. In the stock market, you purchase shares of any company and the company gives you a part of ownership (in terms of shares) of their company. They will use this money to grow their business & they provide you a share of profit of their business according to your investment. Basically, to minimize the risk of losing money company invests its money in a set of multiple stocks so they can decrease the probability of risk and increase the returns. But this is done by a team of professionals who are experts in the stock market and have years of experience in this field. Both investment plans have high risks and give you high returns.


Gold Investment: At present, people invest their money in purchasing gold that’s because people think it is the safest option to invest their money and make high returns out of it. But the reality of this investment option is just the opposite of it. You don’t know whether the gold you are purchasing is real or not and the second thing is storage facility & fear of stealing your gold is the most common affecting factor not to invest a big amount in this option. For example: if you want to invest 1Cr then you will get many gold bars but the affecting factor will disturb you here storage option and fear stealing your gold. You can’t invest a big amount in this option.


Real Estate: Real Estate is oldest way to invest your money and this investment option is the favorite and ever green option of investors. Investors like this option rather then any other option that’s because they can invest money from millions to billions, no one can steal it, storage is very less, and returns are very high.


Things to be remember before buying a property are as follows:


Location: In real estate sector, location is the only thing to observe. Property should be on the prime location and second important thing is development of the area. Rates of the property is only affected by development of area if you have purchased a property where nothing has been developed or in near future there are no planning for development then rates of property will not increase as rapidly. In the other hand if you will purchase a property in a developed area and semi developed probability to increase in rates of property is very high.


Documentation & Legal Terms: In real estate sector, people get targeted of fraud schemes just because of lack of awareness and not re-checking the legal documents of the property. If you have selected the right location for investment and checked all legal documents then you don’t need to worry about fraud.


Real Estate Investment pros are:

· Low Risk and High Returns

· No Storage require to save a piece of paper

· No fear of stolen property


Over the last two centuries, about 90 percent of the world's millionaires have been created by investing in real estate. For the average investor, real estate offers the best way to develop significant wealth.


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