To maintain a credible portfolio of investments that can sustainably underpin the ups and downs of the economical sector, it is exceedingly crucial to formulate a strategic and diversified investment plan. But is it that easy?
Stock trading can certainly pay off, but to say that it is unequivocally a better decision than placing funds in a property purchase is short-sighted. Real estate offers remunerative investment opportunities and it has been garnering global attention for both long and short-term investment horizons. When done the right way, real estate investment in Turkey can offer great returns through tax exemptions, rental yields, and capital appreciation accrued from purchasing below the market rate.
While indulging in stock trading may seem relatively easier, property purchase done with due-diligence can shower sustainably higher cash supplies. So, what is better and more profitable? Trading or buying a property? As an investor, the answer comes down to your risk tolerance, personality, financial means, and ongoing returns.
Here are a few reasons why investing in Turkish real estate can beat stock trading:
The ease of stock trading has proven to cause the downfall of many investors. While constant fluctuation of market cycles is inherent, it is difficult to stay invested when the market falls. Research suggests that trading in and out of share-trade at times of volatility primarily leads to losses.
Billionaire Andrew Carnegie once famously stated that 90% of the millionaires in the world got their active wealth by successively investing in the real estate market.
Since properties are less liquid assets that take time and effort to sell, it is likely to hold on through tough market conditions. Moreover, the accumulated rental yields keep the cash flow in pace with inflation. As the cost of living rises, so does the market price for rental properties.
All in all, as compared to stock trading, real estate investments furnish spun-out cash flow and can act as a bulletproof hedge against inflation.
The stock market faces significant tremors once in a while and the values often go up and down the charts. Research suggests that average investors are not dexterous at capturing the market return of an elementarily balanced portfolio. Never imagine outperforming it. They tend to buy and sell equities precisely at the wrong times that wipes out probable profits in a market where bargains are sparse.
On the contrary, real estate is immune to emotional and occasional buying and selling. As a less liquid capital investment, panic selling is unadvisable and equivalently not possible.
The long-term nature of properties in Turkey ensures that you hold tight through financial ups and downs. All the while, real estate prices along with rental income altogether rise in the uneven times of inflation which is highly unlikely in the constraints of stock trading.
In general, the longer the real estate investments are held, the probability of risks involved drops down. Home prices and equity builds increase over time but the risks associated with the stock market essentially stay the same.
Return on Investment (ROI)
The basic agenda of dealing in the stock exchange is to buy low and sell high. But it is nearly impossible for many to keep an eye on probable entities and monitor values consistently. Since it is not feasible to know everything about a company such as its management, sector, and competitors, institutional investors always have more edge in trading than individual investors.
In contrast to that, real estate units differ in size, features, location, and there is no set market for the exact property that can be universally considered. Often times, there are instances where you can find lucrative deals and buy houses in Turkey at a lower price. If you know the geographical pockets and the type of real estate that is high in demand, you can always cash out stupendous profits. Remember, actively managed real estate offers better returns with negligible risks than stock market investing.
Highly insulated from exogenous variables
Real estate is a local affair. If you’ve made a strategic decision in investing in an economically strong location, you will probably be more insulated than the national or global economical shifts. For instance, if in the worst-case scenario the Turkish economy shrinks in size, it is never likely to affect the rental you can put up.
During the COVID-19 pandemic, the real estate market witnessed only a minimal decline in demand as compared to the bearish stock trends. Such hard times led to lowering the mortgage rates trend all over the world.
Therefore, not only does real estate investment provide insulation from ever-changing financial variables but also offers more control over capital funds.
Fraud limit and cash flow
Rental yields from real estate can furnish a stable and reliable cash flow on a monthly basis. Many investments only enhance cash flow in the long-term or when the property is sold.
Moreover, it is difficult to be defrauded in Turkish real estate for many reasons such as you can show up physically and verify, run a background check on the tenants, inspect your property, repair, and ensure that the building is fully licensed before the purchase is made. In the case of stock trading, you have to trust the auditors and the management without physically scrutinizing your investments.
Investing in real estate or trading in the stock market is a personal choice. While stocks are more liquid and require comparatively lesser investment funds, real estate investments in Turkey are entitled to furnish a passive income flow coupled with the potential for substantial capital appreciation.
Ideally, the decision rests on the investor’s risk appetite, funds disposal, and financial goals.
If you had to select one, what would you prefer? Stock trading or real estate? Leave a comment below! For more information on buying real estate in Turkey, connect with our professionals here.