Where to Park your Hard-Earned oney - Gold or Real Estate?

All the investments are done with some financial goals in mind. Gold, the shining yellow metal, has always been alluring for Indians, whereas owning a property has also been on top in everyone’s wish list. Since times immemorial, we have been inclined to buy gold jewelry as it is indicative of one’s social and economic status. Gold investments at one point of time were considered to be a very wise decision but due to the recent price fluctuations in gold, it is doubtful to say whether it is still considered to be a good investment option.

The best alternative to gold investments is the purchase of a property. Let’s have a brief look on Gold vs. Real Estate when compared on different parameters.

We Indians have always been attracted towards gold may be due to the security reasons, asset point-of- view, or high economic status. But in the past few years, the real estate has also occupied a predominant position in our financial portfolios. The latest report on Housing Finances released by RBI puts some light in this regard. As per the report, 76.9% of people invest in property and 59% of the lowest 20% Indians own a house or land parcel and the real estate has witnessed the largest expected growth. As a 360 Realtors expert, we feel that maybe rarity and durability are the two common characteristics between both of these items.

Calculating the differentiating parameters

The property comes with calculated tax benefits along with slow and steady yet assured capital appreciation potential. Easy home loan and financial options act as catalysts in increasing the sheen of this sector. Purchasing a home gives you a feeling of happiness and satisfaction.

Talking about the attractiveness of gold, it seems to lose its sheen in the last few years. It is not a ready source of income like real estate which earns you monthly income in the form of rent. Property is considered to be one of the safest and best-performing assets even during the tough times. The price of gold is subject to market fluctuations and is linked to the international rates, which makes it a little unpredictable.

Gold investments are preferred investment options for a shorter period of time, say 3 or 4 years or to the max 7 years. But, investments in property have been considered the most suitable and secure option for a longer duration of time, say 15 years. Also, since the price of gold is dependent on multiple macro-economic attributes, the property is considered to be more stable and desirable in the long term. Real estate market prices are less volatile and are bound to increase.

Finally talking about the return on investment (ROI), in case of gold, it is completely eliminated whereas in case of property it depends upon the location of the property. As compared to the developed areas, the developing regions offer a greater return on investment. It becomes a viable option for buyers and investors to invest in townships and satellite areas in order to earn higher returns. In case they choose a comfortable option, the net returns will be appreciable as compared to the investment made and they can sell off the flats at higher rates, nearing their possession time.

Happy investing!!!