Real Estate vs Stocks – which one is a better option?

Are you looking for ways to grow your wealth in Pakistan? Great. That’s what every Pakistani is thinking about these days.

If you’re just beginning your investment journey, then this blog is for you. Today, we’ll explore two popular options – real estate and stocks. However, for new investors, knowing which option is right can be challenging. The secret to smart investment decisions lies in developing a strategy that aligns with your budget and current expenses.

To help you get started in the right direction, I’ll discuss Real Estate vs. Stocks in detail. By the time you finish reading this blog, you’ll be able to decide which investment option is best for you.

The Benefits of Investing in Real Estate

Traditionally, people have gravitated more toward real estate. And why wouldn’t they after Andrew Carnegie, a famous billionaire, said 90% of millionaires got rich by investing in real estate? Real estate has the potential for a great return on investment. What’s more, it can also produce additional income through rental payments.

Let’s begin this real estate vs. stock comparison by looking at a few reasons by pondering over the advantages of real estate investment.

1. Diversification of Investments

There are typically two types of real investment options:

• Residential property – any property suitable for living, such as single-family homes, apartments, condos, etc.
• Commercial property – any property intended for business purposes, such as offices, shops, etc.

But besides investing in different property types, you can also invest in various locations. Since location influences the value and price of a property, you can diversify your real estate investment portfolio by investing in different real estate investments in Pakistan.

2. Tangible Asset

Unlike stocks and bonds, real estate is a tangible asset. Typically, their value appreciates over time. For investors, this offers a sense of security since their money is invested in something that holds “real” value.

3. Holds Long-Term Value

The value of money in the bank will depreciate while the value of real estate will increase in the coming years. This is especially true nowadays as inflation and economic uncertainty are high.

On the other hand, the value of real estate appreciates over time and is less likely to be influenced by short-term market fluctuations.

4. Can Help Generate Additional Income

Investing in real estate can help create passive earnings. For instance, renting out a property allows your real estate investment to generate a consistent monthly income. On the other hand, anyone who flips properties can receive a substantial amount of money as soon as the property is sold.

But besides this, real estate is more than just an investment asset. It can be used as leverage when investing in other properties or as collateral to acquire lower interest rates on a loan.

5. Tax Advantages

Investors can claim a variety of tax deductions when making real estate investments. For example, you can receive tax breaks on property taxes and maintenance expenses from your taxable income, helping to lower the tax burden.

What’s more, real estate is a more tax-efficient investment option when it comes to the capital gains tax applied on the sale of an investment. The capital gains tax on real estate is lower than that of other investments.

6. Flexibility in Making Payments

Although you need to have enough capital upfront to make the down payment, investing in real estate isn’t as challenging as many make it out to be. Most builders provide a feasible payment schedule that actually encourages people to invest in property.

For instance, Chapal Builders provides feasible investment options to inventors from varying income brackets. They allocate affordable monthly payments so that you can easily incorporate a portion of your monthly earnings towards making these payments.

Benefits of Investing in Stocks

Now, let’s look at the other option in our Real Estate vs. Stocks debate. Stocks are an investment option where you can own shares of a company.

1. Easy to Buy

The stock market lists the shares of various companies, so stocks are easy to buy. You can buy them by yourself online or through a stock broker. All you need is an account to start trading.

2. Can Invest With Limited Capital

Investing in stocks does not require a lot of money. You can start investing in the stock market with a small amount. You can benefit by trading stocks of well-performing companies or holding the stocks of companies that pay dividend payments.

3. Liquid Asset

Stocks are a very liquid investment option. They can be bought and sold at any time. And it also means you can convert your investments into hard cash whenever you want.

4. Diversified Investment

Create a diversified portfolio by investing in stocks of various industries and companies. You can rely on the expertise of ETF (exchange-traded fund) managers, professionals who research and analyze stocks before making investment decisions.

Real Estate vs. Stocks: Which Is Better for You?

The answer to this question depends on your investment objectives and how much money you have.

Even though real estate requires investing more upfront money than stocks, it offers significant long-term gains, and the value of your money increases over time. More importantly, the real estate market is considerably more stable than the stock market.

While investing in stock offers the opportunity to make money quickly – even with a small amount of cash – there are risks associated with going this route because of the stock market’s volatility. There are countless stories where investors have lost their savings due to sudden price fluctuations. So these aspects should not be overlooked.

Real Estate Investment Options in Karachi

Since now you know that real estate is a stable and beneficial option for you to expand your money, allow us to share the details of a few real estate projects in various areas of Karachi. You can consider them if you plan to invest in high-value properties.  So let’s have a look.

Navinta Residencies

Navinta Residencies is located in the heart of Karachi –  Saddar. This beautifully-designed apartment complex has spacious flats offering the comfort and style you need.

Navinta Mall

The iconic shopping mall by Chapal Builders is located in the shopping hub of the city. This 5-storey shopping plaza is located just below Navinta Residencies, allowing investors to couple their residential investments with this commercial venture.

Chapal Uptown

Inside a peaceful gated community, you’ll find exquisitely designed single-family homes in the up-and-coming area of Scheme 45. This elite housing project offers numerous facilities that will elevate your standard of living.

Chapal Courtyard 2

As development takes off at full speed, the price of properties in Scheme 33 has skyrocketed in the past few years. So don’t miss the opportunity to invest in this high-rise building with all the high-end amenities you need for a comfortable life.

Final Thoughts

To conclude this Real Estate vs. Stocks blog, we believe long-term investments in real estate are a better option. So consider partnering with Chapal Builders, an established, reputable property developer that ensures your hard-earned money stays safe for years to come. More importantly, they promise to bring great returns on your investments.

Also, a suggestion here would be to choose from a variety of investment options. And no matter which one you decide, make sure to invest wisely. Study current market trends and choose an investment plan that fits comfortably within your budget.