Investing in Real Estate or Investing in Gold. That is the question many individuals are asking themselves. It is quite beneficial for an individual to invest in Real Estate rather than in gold. A Real Estate wholesaler only has to put 10 dollars down and they can profit 5 to 10 thousand dollars once they assign a contract to someone else.
Individuals can also do what is known as lease option which allows them to get in no amount of money down. Investment in rental property will provide a steady cash flow. This is much different from gold because gold is considered dead weight. An investment in real estate will provide a constant flow of cash covering in whereas gold is considered as dead weight because it does not bring in steady income. The thing about real estate is much like gold it is a physical asset. This means that when inflation hits home real asset will rise in price just the same as gold would. Real Estate will almost certainly provide a steady influx of cash with investment in rental properties or other properties of that nature. Gold will yield profit as well but it is considered dead weight because once it is purchased nothing can really be done to cause it to bring in a steady flow of cash.
Six reasons that make gold and other precious metals bad investment than Real Estate.
- In contrast to property investment, there is no financing, thus no leveraging to allow you to build wealth.
- In contrast to tax deferment opportunities, there is no tax advantage.
- In contrast to real estate rental, there is no income potential.
- Your investment is subject to confiscation; arguments that collectible coins are immune from seizure are flawed since there is no guarantee this protection won’t ever change.
- Precious metals are prone to manipulation by those motivated to suppress their value in order to boost paper money.
- If gold does go up in value, the gain is nominal rather than an actual increase in buying power. This is because when gold appreciates it typically coincides with devaluation for paper money. Moreover, those gold profits are taxable, in contrast with the most ‘tax-favored’ status enjoyed by real estate investment. By exploiting the tax-differed exchange it is possible to trade up tax-free with property for a lifetime. Even if dollar depreciates, your asset appreciates with inflation and you have locked in a long-term loan that you repay ‘for free’.