Investors are often faced with many tempting options to place their money, often with the promise of great financial returns in the future; unfortunately, with so much information out there (including significant misinformation), ambitious investors may wonder what the “right” option is. This is especially true when it comes to mutual funds, a compelling investment choice often touted for being low maintenance and yet high-reward. But are mutual funds all that they are made out to be? In this article, we will explore that more closely.
What’s the Deal with Mutual Funds?
Mutual funds are an investment vehicle in which multiple investors pool their money, which is then directed into various stocks or other investments by a money manager.
Mutual funds seem like a decent investing option. Once you’ve chosen the fund you want to invest in, you don’t have to think too hard about what happens. It’s all fairly straightforward.
The thing is, that’s all that happens. You wait for your dividends, and then what happens? As it turns out, usually, not much. A mutual fund might appreciate monetary value and pay off—or, it might crash and burn. Look at it this way. When you invest in a mutual fund, you have a whole host of fees and charges to pay, for an investment that may or may not give you any positive return.
Why Real Estate Outshines Mutual Funds
So, how does real estate stack up to mutual funds? Well, real estate appreciates value over time. It’s a generally accepted fact of this type of investment that it will, after a few years, be worth more than you paid for it. As long as the property remains in good condition, it tends to appreciate value. This has to do with the fact that land is a finite resource. There’s only so much Earth, after all!
Mutual funds can stagnate, but real estate is an investment that you can count on. A good investment property will not only provide you with passive income while you own it (from the rent your tenants pay), but will also gain value that you’ll see when it’s time to sell.
If you’re looking to start investing in real estate, there’s no time like the present! The sooner you invest, the sooner you start seeing the potential real estate has to appreciate value and put money in your pocket. Invest smart. Invest in real estate.
