Is real estate the best way to invest your money?

This essay will discuss the issue of if real estate is the ideal investment as well as analyze articles that present arguments that are in support of and against real estate investment.

Introduction

To make money, investing is fundamental. Real estate has in the recent past become an appealing business idea for many business-minded individuals in the US and across the globe. Recent reports indicate that not only locals are investing in real estate, but also foreigners are investing extensively (Richter, 2017). There are numerous other ways of spending one’s money including production, cash market, manufacturing and even service provision industries but a high number of investors channel their cash towards real estate. With all these available investment options, a fundamental question is whether real estate is the best investment option. This essay will discuss the issue of if real estate is the ideal investment as well as analyze articles that present arguments that are in support of and against real estate investment.

An article against real estate is the ideal/best investment

An article published by Rajmohan Krishnan in The Indian Forbes Magazine critically opposes that real estate is not the ideal investment at all. The publisher goes ahead to differing that real estate is not the ideal financial asset class by giving nine reasons with vital arguments why investors need to avoid real estate investment. The publisher does not have faith in real estate investment claiming that it is characterized with smaller returns rate, always unpredictable, unguaranteed liquidity, prone to numerous litigations that can be costly and is often severely affected by inflation (Krishnan, 2017). The reasoning provided in the article entails the subsequent significant premises:

Premise 1:  Real estate is often suppressed by high rates of inflation and making it an underperforming class of assets with lower returns rates as compared to the equivalent amount in a fixed deposit account in a bank.

Premise 2:  Real estate investment is highly unpredictable since prices differ as a result of the property’s location and not the quality of the construction.

Premise 3: Liquidity is unguaranteed in real estate investment since the seller may not find a potential buyer or get a small amount of money in case of an urgent need of money.

Conclusion: There is much that is beneficial and profitable to be desired in real estate investment and therefore, it is not an ideal investment preference (Krishnan, 2017).

Evaluation of the Quality of Argument against investing in Real Estate

Essentially the reasoning unveiled in the article portrays significant assumptions supporting the conclusion. The first premise indicates the business’ low profitability which is vividly in line with the conclusion that there is not much to be desired in this kind of business. The second premise as well illustrates the unpredictability of the business supporting the conclusion that the business is not the ideal investment option. The third premise demonstrates that the investment has no guaranteed liquidity making it in favor of the concluding remarks. Albeit, all these premises encompasses some significance, they need to be backed up by supplementary evidence for them to efficient and convincing enough. However, some investors might find it not necessary to liquefy their assets; therefore the third premise does not directly impact them. The article has failed to provide efficient data and links statistics used to in order to arrive at such conclusion. There is no methodology or strategy that is indicated to have been used to gather the information about the business. References are lacking as well to support the assumptions given by the publisher. Nonetheless, the premises could be true, but supporting evidence is lacking thus making the assumptions weak and probably a fallacy.

An article in support of real estate as the ideal investment

The article by Tom Anderson in Consumer News and Business Channel website is in support of real estate investment as the ideal investment. The article argues that real estate investment precisely housing business is the best investment based on the findings obtained from an economic survey. The publisher asserts that the stable real estate pricing and the tangibility nature of real estate provide more peace of mind unlike the intangibility nature of the stock exchange. Moreover, the article illustrates that real estate investment has a long-term return potential than other assets and needs to be taken into consideration by investors. The reasoning portrayed in the article entails the subsequent premises:

Premise 1: Essentially, over 27% of Americans opt to invest in real estate the money they do not require for at least a decade.

Premise 2: Real estate takes the position of being the most ideal and preferred investment preference and actually the cash market formerly depicted this.

Premise 3: Land and housing business provide more piece of mind due to its tangible nature in comparison to the intangible stock and cash and therefore several investors prefer these businesses.

Conclusion: Therefore, according to 1 out of every 4 Americans find real estate as the most ideal investment option that is profitable (Anderson, 2015).

Evaluation of the Quality of Argument in support of Real Estate Investment

The argument depicted in the article proves to hold sufficient weight favoring real estate investment, whereby the first premise indicates the total number of Americans in preference to real estate. The exact statistics provided significantly supports this assumption proving how much real estate is adored in America. Moreover, the second premise compares real estate with other investments thus bringing out a clear picture of the rate of preference that real estate has in comparison to other forms of investments. Eventually, the third premise only illustrates the reason why investing in real estate is more peaceful unlike investing in other businesses, therefore, supporting the conclusion. The conclusion precisely makes a stand based on the conditions indicated in the article. In addition to that, a link to the survey used has been provided in the article and available to all readers to refer to it. However, no further references have been provided for further reading. Basically, the argument should not be misinterpreted to mean the business does not have associated risks, but rather to show that the feasibility of the investment overwhelms the risks. This article’s arguments are arguments are substantially supporting the conclusion provided.

Evaluation of Arguments

The scholarly sources I have used provide quite substantial and reliable supporting evidence to back up their conclusions through data analysis from various surveys conducted. In contrary, usually, Non-scholarly sources tend to make assumption unaccounted for or just supported by some biased sources. The Indian Forbes Magazine webpage, my non-scholarly source, has not cited any research, nor provided any reference or even provide any useful data to support the assumptions made in the article. Instead, it only infers that real estate investment is a no good (Krishnan, 2017). This enables non-scholarly sources to give an indication that their implication is real yet in the real sense it is not as how as it seems. In both the scholarly sources and the non-scholarly sources, the target audiences are investors. But in the scholarly source, Consumer News, and Business Channel website, it more focuses on both investors and individuals seeking homes and land for purchase and possession. This source has efficiently provided backing statistics which has aided in bringing out clearly the significance and how much real estate is preferred.

Conclusion

In essence, it is evident that real estate possesses both advantages while also having associated risks and differing rates of preference. However, the lack of sufficient statistics and references to refer to has hindered the clear determination of whether real estate investment is the most ideal business or not. When carrying out future research, it is best for the researchers to use efficient supportive sources and make them accessible for the readers to refer to. Any assumptions made need to be accounted for with a reference.