Investing in real estate or investing in stocks ... experts answer
Interviewer: If you summed up your experiences in one sentence, what would they be?
The investor in the Turkish stock market: It is very difficult to predict or reveal all the fluctuations in the market
The investor in the real estate market in Turkey: Do not wait to buy a property, but buy a property and wait
In the sentence of each of them, the "real estate and financial" investors tried to persuade the economic public opinion of the necessity of accessing their fields, but which of them convinced more and why?
What are the basics of investing in the real estate market and what are the principles of investing in stock markets?
Is the real estate market in Turkey better for large profitability returns with less damage or the stock market?
Any investment in the world and any sector is based on recycling the money that a person owns, meaning that the wealth he earned works on instead of earning more from it in the same way.
The areas and ways to multiply their capital, and here the confusion of some turns into a real confusion of making the wrong choice, as what are they investing in real estate or in the stock market in order to avoid any loss accompanying their investments in the future?
Ambiguity that Al Huda for real estate Investment site deal with in daily basis where clients ask many questions related to the most appropriate investments in Turkey and about investment incentives in the real estate sector without other sectors such as the stock market that big companies market to as a strong alternative paving the way for a quick profit base in an attempt to attract more of new investors.
Is everything about investing in the stock market true or is it just a fallacy? Is a right decision to invest in the real estate sector that has achieved record growth in Turkey in recent years?
What is the difference between investing in real estate and investing in the stock market?
Investing in real estate primarily means that the investor buys fixed assets that generate financial returns on a monthly or annual basis, such as renting an apartment building, apartments, commercial center, or commercial stores, despite the additional expenses that you pay, you guarantee that the resulting difference, that is called profit, is preserved.
As for investing in stocks or a share of them, this means that you are actually buying part of the company, whatever its type is specialized in "textiles, furniture, cars, computers or even sweets", a purchase that automatically guarantees you to obtain a percentage of the profits per share you own it on the condition that there are those profits.
For example, you own 10,000 shares out of a million shares owned by an aluminum manufacturer, meaning that you own one percent of that company.
Why do experts encourage real estate investment instead of stock market investment?
Simplicity and clarity: Many specialists in the investment market consider that real estate investments are more available to all types of investors, i.e. with different financial budgets and whatever type of real estate they own, “apartment, house, commercial store or a plot of land.”
Otherwise, we find investing in stocks is not available to everyone given to his intricacies that even the investors themselves and those who often fail to explain it to others don't understand.
Realism and convenience: investing in real estate means that you invest in something tangible and really present on the ground, which relaxes you mentally and is an important psychological factor.
You see that you have a real property, whether in a house, apartment, office or a piece of land. As for investing in stocks, it always results in fear of investment. In hypothetical shares even if they would actually generate profits in the long run, but the psychological factor for investors, which is usually associated with mistrust and suspicion, causes them to lose money in the short and medium term even if they really would earn if they took more time and have more patience, which is exactly what happens when any economic collapse where they mix Leaves Many make wrong decisions that could cost them a loss of millions of dollars.
Immunity against fraud and fraud: It is very unlikely that the investor will be exposed to fraud in the real estate field, especially as he performs all the proper procedures before purchasing the property, which is the service provided by Al Huda company for real estate investment and development to its clients, as it guarantees them to ensure the integrity of the property and the legal and administrative matters of the property, contrary to investment in the stock market ownership is based on trust placed in the stock exchange broker.
Confidence and profit: Those who want to invest in stocks must be well aware that the market is witnessing severe price fluctuations in the short term.
Stocks may drop from a price of $ 50 to $ 15 or rise to $ 70, which creates great disruption for investors who make wrong decisions because of fear. From the loss may lead to the bankruptcy of companies due to the low prices of their shares due to the process of buying and selling at a wrong time, which makes the investor reach a much lower financial value than the one that he initially invested in, which is what actually happened with a number of international companies where they lost about 80 percent of their value, however, the investment in real estate varies completely alive It gives you a sense of confidence because the prices of real estate continues to rise to the mouthpiece of the real estate market in Turkey.
Calculating profits mathematically: The investor in the real estate field can review his profitability gains through simple mathematical operations that depend on the rate of increase in real estate prices in the region in which the investment was made, given that real estate prices, if they change, are always in a positive direction, but the stock market and given because of its fluctuations, it is very difficult to predict its profits or even restore the capital in the event of repeated economic collapses, so that investors in the stock market themselves say about the stability of some stock transactions "as safe as homes" as a metaphor for the financial stability that the real estate market knows from risks.
Ease of investment: Investing in stocks requires in-depth knowledge of the field and strenuous efforts to move forward, as currency changes and permanent economic news reports affect the investor and its surroundings, while investing in real estate does not need specialized knowledge to proceed with, as many successful experiences confirm that their owners started from buying a house ordinary, its price has doubled in a matter of a few years, which led them to seriously consider a shift towards the actual real estate investment in which they made a qualitative leap.
The possibility of borrowing: Real estate investment allows you comfortably to obtain a loan from the bank that gives priority to real estate loans more than any other asset class and the loan percentage granted by the bank may cover the total value of the property at lower interest rates than any other assets which are impossible characteristics for the investor in the market stocks.
Control ability: investing in the stock market results in total lack of control in the investment because the investor usually needs a broker to deal with his deals and the value of any contribution depends on market conditions and the procedures followed by those who manage the company that contributed to it, which creates a state of uncertainty from Investment, and the situation is completely different if it comes to real estate investment, it is a one-time investment, i.e. direct ownership of the assets with the ability to fully control that, for example, if your real estate offer is for rent, you can raise it with an added value, which is absolutely forbidden to do in the stock market with various companies no matter It was kind.
Impact on the value of the assets: The investor in the real estate can completely influence the value of his assets by using many strategies, including restoration, renovation, maintenance, change of decoration and painting of the apartment or office, which would achieve an increase in the value of the property. Once you spend a certain amount you can recover it twice later, unlike the stock market Which may incur heavy losses for the investor.
Indeed, those who said "the owners of the lands and buildings become rich while they are sleeping" believed that the benefits and wealth provided by real estate investment motivated many even those who had never thought about entering the investment world by appetite for it, so what if the country was "Turkey" where the value of the property increases twice a year, given For infrastructure and vital facilities adjacent to modern residential and commercial complexes.