comparison between gold vs real estate: which is better for investment?


Investments can give you maximum returns once you choose the right option and plan them carefully. While no single option is the best in all given circumstances, the right choice ultimately depends on your purpose, whether you wish to invest for a long term or short term and the risks you are willing to take. Here we compare two very familiar investment options including gold and real estate to see which one is the better option.

Investing in gold


Especially in India, investing in gold is the most popular choice for families. Families in fact treasure gold and pass it on to the next generations as the principal type of family asset. The best advantage of investing in gold is that it provides the greatest degree of flexibility. For instance, you can buy gold in grams depending on how much you wish to invest. Starting from just a few thousands, you can choose to invest up to lakhs depending on your situation and expectations. Also when you wish to get back the invested amount, it is very easy to sell gold. You can do so within hours or even minutes.

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Investing in real estate

Investing in real estate must be approached correctly with the right knowledge of the market situation and the kind of property you are investing in. If this is done, it can provide a profitable and reliable kind of investment assuring substantial returns in the long run. Some of the other benefits of investing in real estate include possibility to create regular income flow, tax advantages, lesser risks and diversification.

Points of comparison between investing in gold and real estate

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Investment size

Real estate calls for a huge investment depending on the prices of the property you choose. You need a lump sum cash readily in hand to buy a property. If you purchase the property through debt financing, you must bear the additional burden of paying the installments.

Gold can be purchased even in small quantities depending on how much you wish to invest and you can keep on adding up to your collection.

Tenure of investment

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Real estate investment will suit long term investment with excellent returns. Gold investment is ideal both for short term as well as long term investment.

Earning potential

Real estate investment can give you regular monthly income if you go for rental arrangement. You can also use this to manage your mortgages. Gold price fluctuates and the value of your investment can go down depending on the market conditions.
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Liquidity

Real estate investment has lesser liquidity. You need days or months to sell a property. The process of selling is also lengthy and complex with lot of paper work and documentation. Buying and selling gold is a simple process done very quickly.

Tax benefits


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Real estate investment provides room for tax benefits in the form of deductions in terms of repairs, maintenance costs, depreciation, mortgage payments, and legal services while gold will attract capital gains tax. Depositing in gold deposit certificate is fully exempted from taxation.

Take home

Gold or real estate – which is a better investment option depends on your situation and purpose of investment and whether you are willing to get locked for a longer time with real estate property for want of more returns or you would like to enjoy the greatest liquidity by investing in gold.
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