Real estate investments refer to any land or buildings you purchase. It is any physical property you buy - be it a house, office space, piece of land, etc. It is a good option for long-term investments and financial stability. Furthermore, it carries less risk and is a tangible asset you can diversify for your portfolio.

While real estate holds promise and massive returns in the long run, mutual funds are no different. They collect money from investors and the total assets are invested in various institutions. These generate returns from equities, money market instruments, debt securities, and other financial instruments.

Returns and value appreciation

Real estate takes a lot of research to get right. But if you do and manage to find the right tenants for your property, you can get a good passive income from it. The value of your property will keep growing and you can consistently handle maintenance and repairs to keep it in good shape.

In terms of mutual funds, there is more risk involved but they have good returns in the long run. The market volatility gets balanced out after a few years and your stocks will increase. Real estate, on the other hand, is not affected by market changes, economic and political implications, and inflation.

Liquidity rate

Real estate has almost no liquidity. You are entitled to and are accountable for the property you own. You cannot turn it into cash as you please and must wait for the right moment before you sell or rent it.

Mutual funds have high liquidity and can be redeemed whenever the investor wishes. If you predict that the market is going to crash, you can redeem all your assets at any point. It often takes just a tap on your mobile screen to withdraw your final amount.

The process of investing in mutual funds is simple but you might have to wait a long time to gain returns and good assets. Real estate has value and the value will keep increasing come what may. This assurance is not present in mutual funds and you will have to keep checking the market to make financial decisions.

Regulatory authorities

There is no regulatory body for real estate investments - you are the only person in charge and can hold full accountability for your property. In case of disputes, the case is taken to the court but it might take years to resolve. Yes, real estate is the least risky option for investment. But during such cases, it is bad for your money and returns.

Mutual funds are regulated by the Securities and Exchange Board of India (SEBI). It is responsible for any breach of proper guidelines by asset management companies. It offers complete security to investors and guarantees proper interest and returns.

Hence, if you wish to isolate yourself from any disputes or potential risks, you can opt for mutual funds. The redressal system is simpler and you will have less money to lose during the case.

Is it possible for me to merge both?

Yes, there is an option for Real Estate Mutual Funds (REMF) which will merge the benefits of both avenues. It will help you invest in securities offered by public real estate agencies at an affordable price.

Real Estate mutual funds usually invests in equity shares of Real estate and allied companies. There are low chances of illegal activities as this system is regulated by SEBI. You can invest for a long-term period and gain a passive income - irrespective of whether you are still a student or if you are planning for retirement.

Which option is better?

If you have a moderate appetite for risk, go for real estate. You will have good status, consistent wealth, and stability. It is a great way to earn a passive monthly income and have a tangible asset that keeps increasing in value. You also gain tax advantages and complete financial security and stability.

Invest in mutual funds if you wish to gain returns quickly and want to redeem your assets at any time. They are liquid assets and can be bought or sold without worrying about a loss of value. But they are affected by stock market failures, inflation, economic issues, and any political crisis.

Keep your financial situation, asset allocation, and prediction of the future market in mind before investing anywhere. Each investment plan has its share of benefits and risks - so choose wisely based on your personalized needs and goals.