INVESTMENTS IN GOLD VS INVESTMENTS IN REAL ESTATE
In such a difficult time for everyone, more and more people ask, what is better to invest money in?
There are two assets that often remain leaders in these disputes - gold and real estate. Indeed, both of them have many similar characteristics:
- They are tangible physically, and this largely determines their popularity, because what you can touch always causes a more realistic feeling of possession.
- They do not lose value: people always need housing or commercial real estate, and gold is the eternal equivalent of wealth and success.
- Both of these assets are related to long-term investments. They are both good for receiving long-term income.
- The value of both gold and real estate is high in any part of the world. In this respect, they are universal.
- And this distinguishes gold and real estate among other investment objects.
We will consider both assets according to the following criteria:
- Prices and their fluctuations;
- Possibility of receiving additional income;
- The cost of holding assets.
So let's get started.
Gold price vs real estate price
There are different types of real estate. And it's not just about the type, area, features of the object in which you want to invest. It is worth considering the location of the property (country, city, district), its condition and the need for additional investments. All this affects the price. In addition, the real estate market has its ups and downs, and they depend both on demand and on many economic and even geopolitical factors. For example, a villa bought ten years ago in an economically and politically unstable region will become a “millstone around the neck”, but not a source of profit. Gold has a stable price regulated by the London Stock Exchange. And, by the way, it has been growing in recent years.
Gold very rarely drops significantly in price, and this is another of its advantages as a long-term asset.
Real estate itself does not generate income. But it can be rented out, or you can take advantage of the short-term rise in market prices and sell it at a better price. But for this you will have to invest a lot of effort: find clients, pay for the realtor services, regularly control the timeliness of payment. Moreover, in the current conditions it is very unsafe to own real estate, since demand has fallen and all the burden of paying for utility services will fall on your shoulders. Gold, in turn, can bring passive income right away, as you can placed it on a deposit in a bank and receive monthly interests without the slightest effort.
Those who have ever dealt with the process of selling real estate know that this process can turn into a real headache. And even the most experienced realtor will not always be able to quickly sell a property. With gold, everything is ten times easier: you can actually sell it at lightning speed. For that we have financial institutions and stock exchanges.
The real estate market is growing every year. Moreover, this trend is observed in the whole world: new facilities are put into operation, developers are constantly announcing new projects. Gold, unlike real estate, is a finite resource. And in recent years, its production has been steadily declining, which also increases its price and significance.
Asset storage costs
How much do you spend for storing gold? It is likely that the answer will be: "Nothing at all." But any real estate object will require expenses for its maintenance: utilities, if the property is used, payment for the services of a managing company, maintaining of a residential or presentable state - all this should be taken into account when planning your investments in real estate. To sum up, real estate only seems to be a profitable asset for long-term investments. In reality, this is a fairly complex investment object in terms of management and operations. Gold has much more liquidity, its price does not fluctuate as much, it does not depend on geolocation, and at the same time it always remains a significant value for the whole world.