Should you invest in Real Estate or Stocks - the Better Investment

 

Real Estate vs Stocks

Investing your money is necessary to make good use of it. However, it is never easy to decide where you should invest your money. There are multiple investment options open to you, but the most popular ones are real estate investment and stock market investment. Both have their advantages and drawbacks. In this article, we are here to discuss whether you should invest in real estate or stocks.

Features of Real Estate Investments

• It is a long-term profitable investment option if you can hold your investment for a long time.
• Real estate investment is time-consuming. It needs you to follow various steps to do the work properly. You have to go through a meticulous research process and then do the necessary paperwork.
• It can be risky due to fluctuating market rates. However, holding it till the prices will rise again can consistently net your benefits.
• Selling the property is not easy, as it requires you to find the best buyer. You also have to wait for the prices to rise.

Features of Stock Market Investments

• Stock market investment is generally a long-term expense. However, it is faster than investing in real estate.
• Investing in stocks is relatively easy when compared to real estate. You need to find a stockbroker, open a Demat and trading account and link it to your bank. You can do all of these online as well.
• Stocks investment is subject to market risks as the prices can fluctuate wildly. Holding the stocks until they generate profits is a good idea if you want to invest in stocks. However, the market trends can be misleading. It can cause the investors to make some bad trading decisions.
• Unlike real estate, you can reap your profits from stocks at any time during market hours. It makes investing in stocks more convenient.
• You can invest in the stocks of different companies, thereby diversifying your assets.

Final Thoughts

So, you can see a clear comparison of real estate vs. stocks investments. While investing in stocks can be more convenient, it is also riskier. But real estate investments usually require a large amount of money. Besides, if you buy real estate to reside in it, it doesn’t count as an investment. So, we can say that if you desire to spend a large amount of money, then real estate is the way to go. Otherwise, you should invest in stocks as it is more convenient.

Invest Long Term

8-10% Growth expected in Housing Finance Companies in Financial Year 2022

Housing Finance Companies

We have recently stepped into a new financial year. The year 2020 saw the decline of various economic sectors. But it is safe to note that many sectors have recovered from the crisis. Among them, the home loans sector has seen particularly significant growth.

The demand for housing loans has risen over the last two quarters of the previous financial year. As such, recent reports suggest that Housing Finance Companies, in all probability, will see a growth rate of 6-8% this year and a further 8-10% in the financial year of 2021-22. Reports also recommend the growth of the Housing Finance Firms and owe its credit to the renewed demand for housing credit in the market.

How will Growth happen in the Housing Finance sector in 2022?

ICRA ratings suggest that most of the HFCs have achieved almost a pre-covid level of expenditure. They are now looking to further increase their disbursement during the fourth quarter of the financial year 2021. The recorded portfolio growth of the HFCs in the first nine months of 2021 was 4.3% from 6% of the previous year. So, the success of these companies is already quite noticeable.

However, according to the vice president of ICRA, the profit of the HFCs will remain moderate despite their growth. He says that the recorded GNPAs of the HFCs are higher than in the previous years. During the year 2020, the people faced significant economic stress. As a result, HFCs have witnessed an increase in overdue. The fact is evident from the rise of GNPAs of the HFCs. December 31, 2020, saw an overall GNPA of 2.7 from the 2.4 recorded on March 31, 2020. According to the vice president of ICRA, they are likely to remain inflated during the financial year 2021-22. Therefore, even though they are experiencing growth, their profits might remain low.

While that may be the case, vice president Sachin Sachdeva believes that healthy provision coverage can keep the HFCs' profitability intact. However, the surge of new covid-19 infections and the inevitable lockdowns of certain areas can pose a threat. They are likely to test the asset protection capabilities of the HFCs.

Summing it up

The reports suggest that the HFCs have maintained decent on-balance sheet liquidity. They have also lessened their dependence on various short-term funding sources and have significantly improved their asset-liability mismatches. If they can keep said liquidity, it will likely enhance their situation further in 2022.

Real Estate Sector Revival - Focus on consolidation

Real Estate Sector Revival 

After the post lockdown situation due to the Coronavirus pandemic, the famous real estate body CREDAI has rebooted itself and planning to work and consolidate towards the revival of the real estate sector. They will also engage with the government for further tax regime rationalism and secured infrastructure status for the real estate. The primary developer body of the real estate industry includes a membership of more than 13000 members in 217 cities and 21 states all over India. They are planning to operate towards enhanced inclusive development. It will help medium to small-sized developers who are facing the issues. 
The first quarter of the real estate business has witnessed almost 44% growth. But since the second wave of the coronavirus has become a concern. One of the biggest problems that a realtor faces in this sector is the working capital. Banks will not offer any working capital, and the interest rate is high. So, hopefully, by next year, the real estate sector will revive completely. 

 

According to the CREDAI National President, Mr. Vardhan Patodia, along with different other members of the currently elected association reported that the organization would offer free vaccination of more than 2.5 crore construction workers at the online sites of the member developers all across India. 

 

As the primary real estate body, the organization has rebooted them post the pandemic and representing themselves in the 2.0 version. The focus is now shifted to consolidation after the past year has passed on. They are exceptionally keen on collaborating with medium and small-sized developers and addressing their problems by discussing the issues with the government. 

 

Supporting the Start-ups

 

CREDAI will soon be setting up a start-up of the name Angel Network and Incubation and Acceleration Centre. It will be an initiative for the Research and Analytics centre, facilitating the real-time availability and authentic data for the future growth strategies of the real estate market. 

 

The start-up plan focuses on reviving the real estate industry efforts and offers a stimulus for boosting the business environment. The welfare further targets to commit to the skill development, labour welfare, and green buildings. 

 

This start-up network will assist and support the real estate agents by offering them access to the member network for business development. It will guide them everything through a hand-holding procedure. 

 

Conclusion

The first quarter of the real estate business has witnessed almost 44% growth. But since the second wave of the coronavirus has become a concern. One of the biggest problems that a realtor faces in this sector is the working capital. Banks will not offer any working capital, and the interest rate is high. So, hopefully, by next year, the real estate sector will revive completely.

3 Code of Ethics of Real Estate Investing in India

Real Estate Investing in India

You can develop, begin and create your real estate business by following different strategies. It might sound easy to set up but developing a profitable real estate business is difficult. Thus, what can you do to secure your business so that it will not fail over time? Well, we have bestowed some of the best three Golden rules for Real Estate that will offer longevity and sustainability to your Real Estate Investing business.

1.) Visualize the conclusion at the beginning :

One of the significant rules for Real Estate Investing for beginners is to always visualize the beginning's conclusion. Ask yourself what your dream business should be really like. It is good to have grand expectations from the business, as most successful businesspersons always think big. If you do not have any end targets clear, you cannot execute a detailed plan for them.

Visualizing and planning the desired result will help you to create a successful roadmap. You can set up the required milestones for every target and checkout if you have achieved them or not. It will also allow you to track every failure and progress. A fix and flip business runs entirely different from that of the buy and hold or a wholesaling business.

2.) Understand the numbers well :

The numbers can make or break any Investment in Real Estate. Every experienced real estate investor knows the REITs' understanding or the computations significance necessary for making the best purchasing decisions. However, most of the newcomers to the real estate business also ignore these numbers. Always keep count of the expenses, profit & loss reports, and operating costs. If you are not comfortable with the computations, then you have to find someone who will do it for you and report weekly.

3.) Always Scale your Business :

If you want to grow then scale your business, if you don’t then it will never reach its full potential. If you are not updated with the new techniques and technologies, your business will start to move downward. Marketing is one of the significant factors in scaling the business for Investment Property. Regardless of what niche of real estate you will be working for, you will require a well-crafted marketing campaign for creating a sustainable business.

Conclusion

By following the above three codes of ethics for Real Estate Investing in India, you will get to know where you will be going. So dream big and never stop trying to make the business bigger.

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