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When Investment comes to mind most people first thoughts are real estate and financial markets (forex, stocks etc). What is though the biggest differences which makes CFDs (contract for difference) so attractive?

Let us name a few of these differences:

  1. Capital
    Buying a property requires a capital even with the support of a financial institution to equal most people’s annual gross earnings. That been said even with as low as ten percent of the acquisition price of the property it might look like a big amount. In terms of Forex, most brokers will allow traders to create an account and start Forex as little as 200 Euros.
  2. Leverage
    If you have the capital then you will not have extra leverage from real estate. If you use a financial institution to borrow the capital that will usually be around the 70% of the required capital. Forex Brokers do provide at the minimum on major currencies 30x the amount as leverage. With the help of leverage whatever amount invested it can produce greater profits at a shorter period of time.
  3. Profit Levels
    Profits are crucial factors when talking about investing in Forex CFD or real estate. The goal of any investor is to make more funds at the end of any investment. When comparing CFD investments trading and real estate investment, the gain works in another way. In the case of real estate, profit is when you buy a property and sell higher.

Example: An investor invested in January of 2000 for around 100,000 Euro. Decided to sell in April 2019 and the value was 250,000 euros. It implies that the return on the investor’s investment was 150% of the principal capital. 150,000 was made in 19 years that will mean it yield 8% (round up) per year. It had investor also used a rental platform to have an additional return of 6% (6,000) per year of which it will cover the maintenance of 2% per year.

Having the same amount in forex and assuming a major currency does more that 300 points in a direction in a day with 1 euro per point and 30x the amount there is the opportunity to make 9,000 per day (9%). Even if you end up doing 5% per month that will mean a 60% increase on your principal. Assuming that you can be 20% correct on your assumed positions it is still 12%.

  1. Product Homogeneity
    Each real estate property has different features: location, size, view, popularity, design, accessibility, extra features (garden, helipad, swimming pool etc). That been said the product is not always the same and can be influenced by many variables. Trading in Forex CFD you will always have to consider three main categories of factors (Economical, technical and phycological) all of which can be mastered through education and time dedication.
  2. Shorting Markets
    Real Estate we invest in order to receive a better return in the future. Basic principle is that scarcity of land. What happens if for some reasons the prices of the property invested falls. It means that you will have to keep waiting for better days or accept the loss and sell. In CFD Forex, you can buy the dip and profit on currency depreciation as well as on the inflation.
  3. Convenience/Comfort:
    The Forex markets are open twenty-four hours in a day 5 days in a week. There is no need of a middle man when you see the opportunity you can act on it. Neither need to leave from the convenience of your own house, you can even trade naked, as it is you and the electronic markets. Investment in real estate these comforts are not present.
  4. Extra Expenses
    The procedure of the Forex investment market is a straightforward and quick operation. The process may need traders to navigate on an internet trading platform. The price of currency pairs will have to be set by brokers where you trade. There is a fair and small cost that may go into any Forex operation. Investors will see that the real estate market comes with a plethora of extra expenses.

The actual price of buying the property may come with several more expenses. Some costs in real estate are the out-of-pocket expenses, lender fees, and down payments. There can be ongoing costs in the likes of legal, maintenance, in case of a loan then interest and insurance fees. For an expensive property in real estate, you will have to provide constant care.

  1. Liquidity
    If you are planning to sell or buy currencies, people will be willing to trade any time hence providing you the opportunity to liquidate within minutes. Real estate property may take from a day until months to clear.

Invest in real estate vs cfd: Real estate investment comes with a plethora of disadvantages and advantages. The truth is that investing in the currency market surpasses almost all the pros of real estate investing.

For CFD trading, dedication, involvement, and following the international financial markets are crucial. A long-term investment in real estate helps people looking for capital gains and rent. If you are only looking for real capital gains, then Forex remains the best. With the Forex CFD investment, you can begin the process using small capital. CFD Forex comes with transactions that have total mediation in them. Forex trading is more comfortable and convenient for anyone to do. The transaction costs in the foreign exchange are smaller than that of real estate. Due to liquidity and product homogeneity, the Forex market is more efficient. Whether the prices go down or up in foreign exchange, you have the chance to get profits.

Follow the posts to learn more about the world of Investment.

keywords: Invest in real estate vs cfd, investment, long term investment, how to invest, invest in real estate, cfd investment


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