Last Modified: 09 Jul 2019  |  Finance and Investments

The lustre of gold has always been tempting to us. Once considered the wisest investment, gold was passed from one generation to the next not only with sentiments attached, but also providing financial security for the future. However, the recent fluctuation in gold prices has shaken many out of their belief and has made them wonder if this glittering yellow metal is still a good investment option. But if not gold, then what?
Homes! Another emotional, yet safe investment possibility that every Indian household actually yearns to own. It is one of the most profitable and reliable investments that generate substantial returns, can create a regular income flow, comes with structured tax benefits and prospects of gradual yet definite capital appreciation. For similar reasons, in the past few years, there has been a boom in real estate investments. The easy availability of loans and higher affordability has only fed this phenomenon further. We help you gain some clarity on the matter.

1. No income potential in gold:
Real estate is one of the best ways to produce a regular income. If you rent your property you can earn a monthly rent, part of which can be used to repay your home loan as well. And if you plan to sell it later, you will always be in profit as real estate prices always appreciate. However, in the case of gold, you earn nothing while it is lying in your closet and the returns fluctuate with the market.

2. Renovation increases the value of your investment:
You can easily increase the value of your property through renovations and repairs. Unlike gold, property dimensions can also be altered as per your requirements. Most home owners over time, build on their land for a higher value. On the other hand, gold’s value decreases with alterations and you may or may not be able to sell it at a cost you expect.

3. The low volatility of real estate:
Volatility can be a major concern for existing and potential gold investors. The price of gold often fluctuates. Hence, it is not as bankable as you might expect it to be. Real estate, on the other hand, is considered a relatively stable investment. Real estate always appreciates, while gold prices largely depend on multiple macro-economic factors. You often end up paying huge rents on your rented homes whereas this amount could have been used as EMIs (equated monthly instalment) on a new property. Codename Dil Chahta Hai Dobara, Off Hosur Road from Shriram Properties offers the right reason to book your dream home now at the cost of your monthly rent.

4. Gold appreciation is mostly because of currency devaluation:
It is hard for most of the people to accept that gold is not a good investment. For thousands of years, gold has been certified as an indicator of wealth, as a currency that survives all the vicissitudes of history and economics. But the fact is that gold is a kind of social construct that has value because we think it has value and the returns on gold is in reality, low. Breaking such an irrational belief is not easy. A lot of investors are unaware of the fact that Indian gold prices are subject to change depending on the international market. Any major fluctuations in the international economy affect Indian prices as well. Dollar plays a vital role in gold prices. Since gold is considered a collectable in the U.S., the capital gains tax rates are higher on most gold investments. Many economists argue that gold only increases in value when the dollar is devalued or inflation is strong. Thus, critics feel that gold doesn’t offer adequate returns in other markets.

5. No tax benefits on holding gold:
Real estate offers structured tax benefits along with the prospect of gradual yet definite capital appreciation while gold attracts capital gains tax. Ample financing options and home loan accessibility increase the investors’ attractiveness of real estate. Ownership becomes much more tangible in the case of a home; by providing a sense of satisfaction and step closer in a buyer’s pursuit of a dream come true.

6. Better ROI:
Ultimately all investments come down to ROI, which is directly eliminated with gold. In real estate, ROI varies depending on the property location. Developing areas provide a higher ROI over their developed counterparts. Thus, it is always better to invest in a property that will see major development in future. If the investor opts for a comfortable payment plan, the net ROI will be higher, vis-à- vis the sum invested and the apartments can be sold at a premium rate, close to its possession time. If you are looking for investing in an option that will give you better ROI, then invest in Codename Dil Chahta Hai, Off Hosur Road by Shriram Properties which is located just 15 minutes from Electronic City. It is the best available residential package in this side of Bengaluru, with Phase I already sold out.

Gold’s value appreciates only with the devaluation of the paper currency, its returns are nominal, liquidity is low, transparency is low and there is no income potential. Gold deposits over 500 gms, without a legit source of income, attract income tax under the gold monetisation scheme. While real estate can produce regular monthly income, give better appreciation, is less volatile, additionally, when the market improves, so does the value of your property. It is wise to include real estate from a branded developer like Shriram Properties as a part of your overall wealth creation strategy.

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