Cash flowing property versus Gold; Which One Should you Choose

[David Tracey]

Investment is considered to be the only way of securing your future, especially your post retirement life; however choosing the right investment option that will give you a better return as compared to other available options is a daunting task. Although there are a bunch of popular investment options, property and precious metals such as gold seem to be most preferred ones. Although the soaring prices of gold in the recent past have lured the investors towards this yellow metal, it has still not been able to surpass property that has maintained the number one position in investment option list.

According to a research conducted in 2011 by the UK based Worldwide Property Group, 72% participants voted property to be the best investment, where as gold just gathered 16% votes. People who have invested in property have received strong returns. Even the gold investors are not disappointed but their expectations might not be met in future. Property, especially the cash flowing one is considered to be the safest option as it not only secures your future but also helps you financially in the present.

A cash flowing property serves as an income potential for you apart from your investment for future, whereas precious metals such as gold doesn’t give you a fixed monthly income. Cash flowing property can therefore, help you during bad financial times such as during job loss, as you will still have a positive cash flow along with your safe financial future. Gold investors however, will have to sell this metal to get their money, thereby losing their future security.

The percentage of value appreciation of a cash flowing property is much higher than that of the gold. Whether you are renting your property or selling it out, you are sure to receive favorable returns. Although the return is dependent on market moods and is associated with high risk factors, the positive cash outflow every month will add up to your profits.

Whatever be the amount you have invested in gold, it isn’t going to give you any tax benefit. This is another big reason why people prefer investing in cash flowing property that gives you all normal deductions that you can get from many other low budget investments such as buying dividend stocks. The cash flowing property also helps you outweigh the outgoings such as your loan interest, maintenance and security of the property, body corporate fees, etc. In short, if you buy a cash flowing property wisely, you could be able to take out the full or at least a half of you monthly installment from it, thereby reducing the burden on your pocket.

Gold or any other precious metal won’t help you meeting your daily or monthly expenses. It will only add up to your profits as its prices go up. Moreover, the profits that you receive in gold are taxable, whereas the positive cash flowing real estate investments are the most tax-favored ones. This clearly indicates why most investors choose cash flowing property over gold.