INVEST IN PROPERTY VS SAVINGS IN FIXED DEPOSITS

Investing normally incurs when a person intend to get a return from something that they have put their money on. These days there are two typical investments that people would normally go for and it is either investing on a property or in a saving. Investing provides quite lucrative return from the investment for the risk you take on while in terms of saving you tend to face less risk.

We will dive more into the topic to show you the pros and cons or difference from both investments and which you should consider later.

Investing In Property

Investing in a property happens when you intend to earn a return from the property you have purchased. The return on investment can be from the rental income or from the future resale of the property

An investment on a property can be a long term endeavor which include buying property then rent it out, and only selling them upon retirement age. This is also one of the key considerations when you involved yourself in property investments. Your property investments strategy could also be affected by your decision to invest in either condominium or landed terrace house.

Benefits Of Investing In Property

There are some of the characteristics that make investing in property a bit more appealing compare to other investment alternatives.

1. Force savings – loan installment is a commitment that you normally will allocate for. You will not easily stop making payment when you see some things to buy; this will eventually act like a force savings.
2. Tangible – You can show it to your family or clients. You can see and touch it because it is real. This will give you a certain degree of control over the investment.
3. Proper management – since real estate is tangible proper management is needed in a hands-on manner. Tenants’ complaints should be addressed in clear manner and fast and when it starts to age, it should be renovated for maintenance purpose.
4. Low liquidity – real estate is difficult to sell because of its low liquidity feature. The deal for selling property should be privately brokered.
5. Return – there is a potential return from the capital as well as from the rental income.

Savings

When you decide to save money then you should aware that saving means that you will face with constant risk as compared to investing to the property. Saving money might be done by putting your money as deposits, or into a unit trust.

Putting your money in bank also ensures safety of your money and you can be able to withdraw it any time you desired.

Benefits Of Saving In Fixed Deposits

These are the characteristics that you should know about your saving accounts. A saving account is really high in liquidity, very low risk investment and a very low rate of returns.

1. – Savings in fixed deposit has a high liquidity, which means that it is very easy for you to take out the money by withdrawing the money from the ATM nearby. That makes it difficult for you to accumulate funds.
2. – Savings is quite low risk, because most of the commercial banks wont just go bankrupt. Even if they do, they are backed by the Bank Negara Malaysia up until RM250,000, hence making it pretty low risk.
3. – Low risk, low reward. You can be rest assured that savings do not earn you very high return. Sometimes, the normal interest rate could be as low as less than 1%. Even savings in fixed deposits only gives you 4%, if you placed 12 months FD tenure. If you withdraw halfway, you will lose all your FD interest.

Conclusion

Although saving money comes with few perks of you being able to take the money out anytime you one, but it still have their own downfall. For example saving money only provides you little rate of return compared to investing to property, which promises lucrative return for you. Property investment has proven to give you with better rates of return and more lucrative earning in the end.