Aged old debate should we invest in real estate or stock
July 01, 2018
Real
estate
When you enter into Malaysia property market,
there are a myriad of options for you to opt for, be it low cost flat; serviced
residence; condominiums; townhouses; linked houses; commercial shops and
offices; and of course even physical land. To dive further into the property
market, you will need to decide yourself whether you want to consider investing
in under construction or fully developed property.
Stocks
This is a form of investment in Malaysia in
which you purchase stocks. This means that you are purchasing a piece of a
company. Regardless of the products or services that the company is involved
in, you will benefit from part of the profit of the company for each and every
share that you own.
Why
invest in real estate
One of the reasons why you should invest in
real estate than stocks is that it is a more comfortable form of investment, as
it does not involve a lot of complex transactions as it might happen with
stocks. Also, with the rise of internet, one can complete their research using
some of the most reputable property listing website such as PropertyGuru.
The other great thing about getting involved
in real estate in Malaysia is that you put your money in a tangible investment.
This means that you have peace of mind because you can see where you have
invested your money. This is unlike when you invest in stocks because you
cannot see what you have bought.
Investing in realestate is also less risky than when it comes to stocks. You are less likely
to be defrauded as it might happen when you invest in stocks. This is because
you will be able to see what you are buying unlike stocks that are not
tangible, meaning you cannot know if you are being scammed or not. When you are
buying land or any other property, it is possible for you to carry out
background checks and ensure that you are buying something genuine. When you
decide to buy stocks, you have to ensure that you are buying from a reputable
company with trustworthy auditors and management. It is easy to structure debt
when you want to invest in real estate than it happens when you want to buy
stocks.
Shortcomings
on real estate investment
When you compare stocks to real estate in
Malaysia, it involves a lot of work. This is because you will be involved
directly in managing the properties and even if you hire professional to do the
management, you still need to be involved. You will have to deal with calls of
your tenants complaining of leakages or other problems with your properties.
This does not happen when you invest in stocks because it is the company that
manages your stocks, so you are not involved in any way, making it hassle and
stress free.
Real estate investment might cost you money
if your property is not occupied. This is because you will still be required to
pay utilities, taxes, maintenance and others. This means that if your property
remains unoccupied for a long time, you have to get money from other sources to
keep your property intact and safe. When you invest in stocks, you feel safe
because you get no such calls because your money is put in shares, so no
tenants or clients are involved. Of course, thelist of risks can go on and on.
Why
you should consider investing in stocks
Studies have shown that investingin stocks has long-term benefits. When you buy the stocks and reinvest in
dividends and holding them for a long time you will gain more money in the long
end. Stocks are very advantageous because you will also be purchasing a part of
another business that you have not invested in creating it. You will benefit
from a business that you do not spend any money or time running it. There are
professional managers running the company for your own benefit. This is unlike
the real estate where you have to get involved in the day to day management.
There is also diversification when it comes
to investing in stocks unlike in real estate. There are many companies in
Malaysia that allow you to purchase dozens of stocks at a flat monthly fee for
less money. This is unlike in the real estate market where you have to invest
in large sum of money. Therefore, even if you do not have a lot of money, you
can still invest in stocks and gain some profits. When it comes to real estate,
you will need to have large amount of money and if you do not you have to incur
large debts in terms of loans or mortgages.
In terms of liquidity, you better got for
stocks compared to real estate. Stocks are more liquid that the real estate.
Just within a few regular market hours, it is possible for you to sell your
stock shares and attain high profits. This can happen just within some very few
seconds. This is unlike in real estate whereby you have to list your property
or land. This might take a long period of time before you can get a buyer
willing to pay the price that you desire for your property. If you have a
rental property, it might also take you long time before you can get a worthy tenant.
It is easier to get borrow money when you
want to invest in stocks than in real estate. If you have received approval
from your broker, all you have to do is to fill a form and get the amount that
you want against your account. In case there is no money what happens is that a
debt is usually created against the stocks that you purchase. All you will have
to do is to pay interest which is usually very low.
Cons
of investing in stocks
One of the greatest shortcomings of
investing in stocks is that they can fluctuate greatly within a very short
time. The return you get is determined by the performance of the company in
Singaporean market. This is unlike the real estate where the price of
properties or land does not deprecate. You are assured that when you buy a
property at a certain price, it will appreciate within a short time. This means
that when you want to resell it you get good returns for your investments.
Conclusion
As you can see, each of the above form of
investment has its own benefits and shortcomings. It is good that you consider
all of them, so that you make an informed choice. You need to make sure that
you have enough money before you decide to put it in either stocks or real
estate. It is also important that you seek professional advice from investment
experts in Malaysia, to guide you on the best investment to put your hard
earned money.
~ Sharing is caring from Cikgu Norazimah ~
1 comments
IMO, debating which is the best investment is not really a sound advice; different portfolio have different strength/weakness/pros/cons. The bottom line is to understanding where you put the money into it and know the reason why. The advice that I'm holding on to is to have a diversified portfolio for security. :D
ReplyDeleteSebarang bentuk komen adalah tanggungjawab anda. CN tidak akan bertanggungjawab ke atas komen yang tidak berhemah.
Terima kasih di atas komen-komen anda.