Residential housing prices in the nation have tripled in the last few years. As per a data, it has risen by 13.8% annually for the period of Mar '09 – Dec '18. During this phase, prices in Delhi (15.9%), Mumbai (15.7%), and Kolkata (15.3%) has witnessed the maximize rise followed by cities like Chennai (10.6%) and Bangalore (10.0%).
So, the question that arises here, does it strongly support investment into real estate?
Returns
Well, during the mentioned time period, equities as an asset class outperformed real estate returns by a small margin of 60 basis points. As measured by Sensex, the equity performance rose by 14.4% during this time. 20 equity funds gave an whopping average annualized return of 18.3%!
Even though real estate has performed well, the truth remains intact; equity funds outperformed them. And when in the future, financial experts predict equity funds to deliver about 12% every year keeping in line with the growth of the economy. This reason proves it is always better to put your money in mutual fund investment. This blog has discussed several such other issues below.
Convenience
Buying real estate involves plenty of paperwork and constant oversight. It can be a complicated process! Also, it takes time to obtain possession and there are transaction costs involved in the form of stamp duty and registration.
Moreover, post purchase, there is the need of hands-on monitoring for attending maintenace related issues such as fixing sewer lines, building-related repairs and painting. But in case of mutual funds, the whole process is quite easier. Just buy and sell funds at the click of a button and there is no transaction costs involved either.
Unlike property, an investor can switch from one fund to another in an hassle-free way. This speaks for the benefits of mutual funds! Right mutual fund investing advice from experts will further enhance your returns.
Liquidity
Sell your fund and its investment proceeds will be credited to your bank account in just a few days. Also, there is no ambiguity in relation to its price since NAVs are declared as per regulatory norms. But in the case of real estate, selling can take months and sometimes, years. This is due to the fact that you have to actively solicit buyers through advertisements or contact agents.
These 3 points clearly say mutual funds is better than real estate any day! Buy a house to live there and to fulfill your financial goals, contact experts like Wealthclock Advisors and choose the best mutual funds.