Is realty a better investment compared to stocks?
Making money on stock market for one who has no trading experience might not be easy as virtual trading ups and downs are very quick
Investing a portion of income in right avenue has always been a tough task and people often are clueless whether they should invest in the stock markets or real estate.
Making money on stock market for one who has no trading experience might not be easy as virtual trading ups and downs are very quick. Making an investment in wrong stocks can make an investor poorer. On the other hand, in India people prefer real estate as it gives a feel of ownership and they understand the valuation of physical assets better than stocks.
In terms of return, stock can give an investor better return, however, investing on the stock market without understanding fair valuation of the stocks can be risky.
Ace investor Warren Buffet said never invest in business or stock that you do not understand. Therefore, both have their advantages and disadvantages, and there are several aspects that make them unique investments in their own way.
Investing in stocks
The profit margin inherent in stock investment has always been higher when compared to other asset classes and investments offer liquidity and flexibility which real estate can’t offer.
Investing in real estate
Unlike stocks, real estate is a tangible asset that gives greater psychological comfort, security and satisfaction. While the stock markets are far less predictable, the return on investment in real estate is reasonably consistent.
What per cent of total income should a person in the age group of 25-39 years invest in real estate?
Experts believe that one's monthly instalments should not exceed 30- 35% of their gross monthly income. If your property is from a good developer and fits your budget, but at the launch stage and when you exit, you get some value appreciation. That becomes your seed money and banks allow you to exit one to replace with another.
Many new home buyers get excited and forget to consider the amount of cost they need to pay to acquire a home. Over-expectation from your income can put you in a financial stress. If the property markets in your city are very expensive and you cannot afford the property that you want to stay in, invest in whatever is affordable even in the periphery of the city, if it is from a good developer and fits your budget, but at the launch stage and when you exit, you get some value appreciation, says MagicBricks.
When is the stamp duty supposed to be paid?
In general, there is stamp duty to be paid every time there is a transfer of ownership. It is calculated on the basis of the total value of your property. The amount to be paid varies from city to city.
Factors that one should consider while calculating the home loan instalment per month?
For calculating the monthly home loan instalment, consider your monthly family income now and expected in the future. Family income includes yours as well as your parent's or spouse's income.
Secondly, your family's current expenses, including all other loans you are servicing, are very important to be considered. Do not spend more than 50% of the income on a monthly EMI, it said.
Why do banker's home loan interest rates differ?
Interest rate on home loan can make a lot of difference as a few percentage point lower rate on the total loan amount can be substantial. It is wise to compare all the available options and terms and conditions.