Investors Are Moving From Real Estate To Mutual Funds For Better Returns


Don’t be too biased and jump into buying a residential unit or invest in land

It is a tried and tested fact that mutual funds give better returns.

We might think of investing for several reasons and sometimes investing intelligently is what we need. The question is why do we invest? We invest to get better returns in the future and that’s why it is very important to think twice or even thrice before investing so that it turns out to be a smart investment and not a decision that we might have to regret later on. The common things that we invest in are gold, real estate, etc. because our elders suggest us to do so but now times have changed and with changing times we have to change our concepts too. Previously people didn’t have an idea about mutual funds but nowadays believe it or not mutual funds are way better options than gold or real estate so in case you want returns in the future keep your options open.

The reasons for choosing mutual funds over real estate for better returns include –

  • Stability – The real estate market has recently become very volatile which is why investors are moving from real estate to mutual funds for good returns. Yes, it is true that no one likes to take risks, and previously mutual funds were considered to be pretty risky. But as per the current scenario, the real estate market isn’t a smart sector either, where you can invest.

 

  • Performance – The real market in India is not performing well at the current moment. The strongest real estate zone in Southern India is also experiencing a drop in sales. In 2019 itself residential projects in Hyderabad and Bengaluru have experienced a major drop of 32 and 35% as far as the total sales are considered. Now, if we consider the sale of residential units in the 7 top Indian cities then the picture is pretty ghastly as the total sales are going through a depression phase. Sales figures have declined by almost 18%. Chennai is experiencing a drop of 48% in total sales as far as newly launched projects are considered on the other hand Hyderabad has seen a drop of 51% in total sales, at least, in the same segment. Also, you will be shocked to know that the prices of these real estate properties remained fixed everywhere with the unsold stocks witnessing a drop of 5%.

 

  • Minimum hassles – Investing in real estate means there may be possibility that you can get trapped into some kind of litigation or some sort of land-related disputes. Once you get stuck it becomes very strenuous to handle. In a country like India, a land-related dispute can go on forever. Investing in real estate means you are inviting a lot of hazards whereas if you consider mutual funds the matter remains rather simple and there is no chance of any litigation or dispute because no third party will ever be able to get into this matter so this remains between the investor and the mutual fund company or bank that has provided the mutual fund. Mutual funds are better and tension free option for an investor.

 

  • Monitoring – If you are investing somewhere it would be great if you could understand and monitor the decline or growth of the entity in which you have invested. Considering this fact, it can be safely said that mutual funds can be monitored online from time to time whereas you might become a headless chicken once you invest in real estate because you don’t really get any update or understand how much you can get from that investment in the future. Today, it is not smart to be clueless especially with all the tools at your disposal you can invest intelligently.

 

  • Higher gains – It is a tried and tested fact that mutual funds give better returns. As per the analysis of the Indian market, it has been revealed that in the case today in Mumbai, you want to invest 50 lakhs in real estate after say 10 years you will receive 15% return on the capital that you have invested which means you will get ₹2,02,27,789 approx. whereas if you invest the same amount in a mutual fund, you can at least benefit 18.03% which means you will get ₹2,62,35,786  that too in just 5 years. So you can already understand how much you are gaining.

 

  • Investing smaller amounts – One more, good thing about mutual funds is that you can invest small amounts. If you decide you have the capability of spending fifty thousand in a mutual fund you can, no need to go big or go out of your way to invest but for real estate, the matter differs a lot. Real estate calls for big investments. You can also invest small amounts over a long time at regular intervals through SIP.

Don’t be too biased and jump into buying a residential unit or invest in land just because your friends are doing the same. You need to first study the market trends and the current scenario and then decide which one is better for you. You have to consider the fact that you want good returns and for that, a little bit of risk is okay. In case of mutual funds, the risk is nominal because you will keep a check on the recent development or shrinkage of the mutual funds.

Read documents very carefully before investing in mutual funds and also have some idea of the market and you’ll do well. To ensure that you don’t incur a heavy loss, you can put in small amounts, you have that option always, and this will also ensure your peace of mind.

Today if you are planning to invest in real estate you might think of taking a loan which is again a huge long-term liability. Loans might just kill your other aspirations and expectations. On the other hand, to invest in mutual funds you can think and seek financial suggestions from a professional in this field. No huge investments will be needed and you will be free of an additional financial burden.

That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.

With this one can say “Mutual Fund Sahi hai”,  so let me do Nivesh