Real Estate vs Mutual Funds – Which is Better?

Real estate vs mutual funds is a debate that has been raging for long. They are two investment avenues which can help you enhance your riches in the long run. For long, there has been an argument as to which of these investment avenues should one opt for? In this article, we will be comparing them on various parameters, which will help you make an informed choice. Let’s get started.

Thanks to digitalisation, it’s very easy to search and invest in real estate as well as mutual funds. There are many online property portals which help you connect directly with the seller. These portals have filters which you can use to zero-in on your chosen property.Similarly, you can invest in mutual funds online either through the website of the AMC or a third-party app. Once, you are KYC-compliant, you can invest in any mutual fund of your choice either through systematic investment plans or lump sum .

Real estate investment requires a sizeable chunk of funds, which can run into lakhs of rupees. Also, if you are investing in a property in a posh location, the quantum of money goes up by several notches.
On the other hands, mutual funds help you start small, and you can begin investment from as little as Rs. 500 per month. Also, with an increase in income, you can top-up your investment, which can help you build a bigger corpus.

Real estate is a non-liquid asset, which means it can’t be converted into cash easily. Having said that, if your property is in a location that has all the required civic amenities and facilities, the chances of liquidating it is fairly high.On the other hand, you can easily liquidate your mutual funds. Once you place the order for redemption, the money is credited into your bank account the next day.

Returns from mutual funds are market-linked. The returns are not fixed and depend on various internal and external factors. However, mutual funds, especially equities, yield the desired returns only if you remain invested for the long haul.Real estate returns, here also, depend on several factors and aren’t fixed. Having said that, if you remain invested for a long period, there are chances of earning handsome returns from real estate investment. In Conclusion Investing in real estate and mutual funds can help you diversify your portfolio. However, make sure to know the legal nitty-gritty of investing and consult an expert, if required.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.