Investing in diamonds or bricks?

Never before was there so much money on the savings accounts, despite the historically low interest rate on a savings account. Still, more and more people are looking for alternatives and investing in real estate is one of the alternatives people are considering? But does it still yield any profit? We will compare this to investing in diamond.

The principle of investing in real estate is very simple: buying to let it, thus getting profitability from rental income. When the home is resold, there will usually be a nice added value. Every research indicates that investing in real estate is still very popular today. Investing in diamond is simple in a similar way: buying to sell with an added value afterwards. “Rental income” you evidently cannot get from investing in diamond.

Profitability

The profitability of real estate depends on different factors, such as the initial purchase price, the rental price, renovation costs, etc. Analysts indicate that one can expect an average profit of 3% per year. That sounds like music to one’s ears, because this is a lot higher than what can be earned from a savings account. Furthermore, it’s a more stable profit than shares for example, where the rates are sometimes unpredictable.

  Diamonds have an intrinsic and durable capacity (http://www.baunatdiamonds.com/nl/waarom-diamanten/intrinsieke-rentabiliteit) to increase in value.  Different studies analysts indicate that diamond prices will structurally increase the coming decades.

Tangible

Houses, apartments, garages, studios… it’s all tangible and real. You see what you are investing in. For investors who value security, real estate is therefore much more interesting than shares or bonds that are “virtually” in an investment portfolio. The same goes for investing in diamond. You do not get papers that represent the diamond, but you get the diamond itself in your possession. 

Increase in value

If you can and are willing to take matters into your own hands, you can contribute to the increase in value of your property. A townhouse that needs renovation can often be bought at an interesting price. If you do the renovation yourself, you increase the value of your investment by yourself. Loose diamonds can also increase in value, by having them set jewellery. Old family jewels for example, could get a makeover, which also implies an increase in value.

Serious investment

No matter how you look at it, to be able to invest in real estate, you need a large sum of money.  Even for the smallest house, you need to pay a minimum of 150.000 euro. On top of that there is a whole bunch of other costs: notary fees, registration fees… You can invest in diamond for a much lower amount. The needed starting capital is much lower than when you invest in real estate.

Investing in diamond has many advantages. It is simple, they offer guaranteed profit, they are tangible and you have the possibility to increase their value yourself. Furthermore, you can start with a small amount. The experts of BAUNAT DIAMONDS will give you information based on your personal preferences. 

Author: San Meuleman

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