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Which is the Best Option – Mutual Funds or Real Estate? Know Gary and Shelly Viewpoint
Real estate generates valuable returns when markets are at a peak. Unpredictable market conditions make it a bit challenging to measure future returns in the sector.

Which is the Best Option – Mutual Funds or Real Estate? Know Gary and Shelly Viewpoint

Real estate generates valuable returns when markets are at a peak. Unpredictable market conditions make it a bit challenging to measure future returns in the sector. But when you purchase a property at a low price and sell it when the prices are higher, it can bring immense profitability. Well, timing it right is the key to driving maximum returns, which requires thorough planning and market research.

Mutual funds, on the contrary, offer a variety in terms of market risks, caps, sectors you invest in, etc. The profit depends on certain risks and financial goals. Returns can be roughly calculated because interest rates and overhead expenses are visible. 

Recently, I met Gary and Shelly at an event and got very impressed with their achievement, types of projects they handle, and level of expertise. They gave me more clarity on whether to invest in property, how to build a solid foundation, and determine what’s good for my business in the long run. As I was confused about whether to invest in real estate or mutual funds, Gary Golon closely worked with me to do considerable market research and broadened my scope of understanding.

After getting quality consultation from Gary Golon, here’s my take on investing in mutual funds vs real estate:

Why Invest in Real Estate?

·         A Wide Array of Products

Mutual fund investment is ideal for people with risk appetites and clear goals. Equity investments are great for short-term needs and thus, enhance a portfolio with high market risks to drive better returns in a short time span. On the other hand, balanced mutual funds are suggested for higher returns over the long term. 

·         Risk Diversification

General risks include market, company, and sector risks. But these can be controlled through portfolio diversification. If risks are foreseen, selling mutual funds or switching between funds can reduce risks and generate great returns.

·         Economies of Scale

It involves buying and selling securities in high volumes, which minimizes the cost per unit of a mutual fund scheme.

·         Modes of Investment

Investors can either invest in a lump sum or installments or a combination of both. Other options include systematic transfer plans, switching between funds, systematic withdrawal plans, etc.

Why Invest in Property?

·         Liquidity 

You can sell off property’s liquidity whenever you wish. If you own a second home, you can enjoy a passive rental income over time and save for future security.

·         Investment Objectives

An investor purchases a property for many reasons, such as wealth requirements, life goals, retirement benefits, and investment purposes. Understanding a property investing scheme is key to closing better deals and earning good returns, depending on the market price of the location.

·         Tax Savings

If you plan to sell your property within 3 years of purchase, the return will drive short-term capital gain that minimizes your share of the return. If you’re selling the property after 3 years, you will be liable for long-term capital gain.

Real estate can offer significant benefits that aren’t correlated with the stock market. But costs and risks can be higher when investing in physical property, which is why REITs are the best choice for those who have limited money and aren’t seeking primary residence.

If you want to buy rental properties or start flipping homes, make sure to be familiar with the risks involved and how you will earn back your investment.

Which is Better – Final Verdict

I believe buying property in form of a house is essential. One should plan on buying a dream home and take it as an option for investment in the future. Real estate might be an ideal investment when prices come down and rental/mortgage rates converge.

Mutual funds based on the above-listed pointers seem to be a good choice. However, one needs to be well-aware of asset allocation, understanding key factors, and returns. 

We all might have heard stories about fraudulent practices in the real estate sector. Thus, investors need to be mindful about investing in recognized locations and undertake a background check for a worthwhile investment opportunity.

I’m grateful to Gary Golon for being my lifesaver when I was managing commercial and residential building properties during my initial days. His valuable advice and support made a big difference in my ROI and overall vision.