Mutual Fund vs. Real Estate

Mutual Fund

Often people say that real estate is more comfortable than mutual fund and gives a higher return than mutual fund and also it is less risky and also they think that they can get the full control of it.

So many people can give their own example. A person bought a property of 20lakhs in Thane in 1999 and he sold it in 2018 he got 90lakhs which is a huge profit. Is it not phenomenal?

The demand for real estate is always growing up so the price is also going up. History even has proved that too. This is one of the reasons why real estate is one of the most favorite investment options to investors.

Mutual Fund is not as old as a real estate it is still new in the Indian investment market. A mutual fund pulls money from the market and invests in various asset classes as per that fund’s investment objective. A mutual fund is perfect for someone who doesn’t have much knowledge about investing. It charges a small amount of fee for managing the investment of the investors.

REAL ESTATE MUTUAL FUNDS
City 10 years of average real estate return Fund Name 5 years of average return
Kolkata 6.5% Reliance Large Cap Fund 17.86%
Mumbai 12% DSP Blackrock Micro-cap Fund Reg Plan Growth 31.98% (CAGR)
Delhi 6% SBI Bluchip Fund(Large Cap) 18.04%
Hyderabad 4.3% Mirae Asset India Equity Fund 20.62%
Chennai 6.8% Magnaum Midcap Fund 28.95%
Pune 7.2% Aditya Birla Sun Life Advantage Fund (large cap) 22.38%
Bengaluru 7.3% Canara Robeco Emerging Equities Regular Growth 29.24%

So you can see the difference between the real estate and large-cap mutual funds. Large-cap mutual funds gave higher return than real estate even large-cap don’t have higher risk involved. It is always advisable to invest for at least four years for higher returns.

Taxation and Returns

ELSS (Equity Linked Savings Scheme) offers tax benefits on your investments under section 80C. You can avail the tax exemption up to Rs.1.5lakh. You can decrease your tax burden while investing in ELSS Mutual Fund. 

While you are investing in real estate the profit will be always taxable.  

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