REAL ESTATE INVESTMENT VS STOCK INVESTMENT

Investing your money in a profitable business is one of the best decisions you can make for your future financial stability. One of the major concerns you may have as an investor is finding an investment opportunity that generates high ROI in the future. Although this task demands a lot of patience and perseverance, the returns are worth it in the future.

You will find many investment opportunities in Pakistan, however, investing in real estate and stocks is the most secure option amongst all. Some investors prefer real estate investment as it gives more command linked with properties. On the contrary, some people like stock investment as they require relatively lesser capital.

Let’s look into the advantages and disadvantages of both types of investment.

Real Estate Investment in Pakistan

Approximately 2% of the country’s GDP goes into residential construction which sums up to 5.2 billion USD per year. The real estate sector of Pakistan is an amazing industry to put your money in if your goal is long term investment.

Depending on your budget, you can either buy a piece of land, building and apartment, or invest in a project. Investing in real estate allows you to own a tangible asset. This makes the analysis as well as the decisions easier for you as you can visit the property to assess it. Also, property is a very diversified asset. For example, you can rent out the property you own and get extra money as a source of passive income. This is what most investors do.

Moreover, there is a lesser risk of financial loss and it offers more certainty and security as compared to other types of investment.

The downside of real estate investment is that it requires perseverance. So if your goal is short term gains then the real estate sector might not be the best choice for you. Another issue you might want to consider is the fixed costs associated with this type of investment, like the costs for renovation, maintenance insurance, and others. These expenses may create some tension on the financial side.

Stock Investment in Pakistan

If you don’t have a lot of capital, investing in the stock market is a wise option. By buying a stock, you indirectly get a share in an organization or a business. When that business makes a profit, you’ll also be getting profit through dividend factor. Stocks, unlike real estate assets, are liquids assets. It basically means that you receive profit in actual cash within a very short period of time. So, if you want to invest to get quick money, this is the right option for you. Moreover, this type of investment doesn’t come with costs for insurance and maintenance.

However, stock investment also has its downside. Firstly, you need to have a good know-how of the financial market if you want to get a good return on investment. Without having proper knowledge of the market and other technical methods and terminologies, you can’t make profit among competitors.

The degree of control is also lesser in this type of investment as compared to real estate. This is because you’re only putting shares in a business or company which is not in your control unless you own the business. Selling your stocks may become necessary in this case. The fluctuation in this market is unanticipated and can result in drastic changes, making this market highly unpredictable and risky.

Here was a quick round up of the pros and cons of investing in the real estate market and stock market. However, we’d still recommend you to do some research on your own to know all the rules & regulations regarding any investment you’re planning to do in either market.

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