Apartment or car – which is more profitable?

Real estate and cars are some of the biggest investments that individuals make. Nowadays, there are cars worth as much as an apartment and apartments worth as much as a car on the market. But in terms of investment, the same amount invested in chattels and real estate will behave differently.

One of the main problems with a car is that it gets cheaper. As experienced sellers say, as soon as a car leaves the showroom, it immediately loses up to 1/3 of its price. Further it becomes a “used car”, which will only lose in price.

An apartment, even though it is used, will grow in value. Now prices for urban real estate rise by 5-7% per year. For 5 years of use, the apartment will rise in price, and the car during this time can already go to the scrap metal reception.

Both the apartment and the car also need to be invested in. If we compare the cost of housing and utility services and the cost of refueling and maintenance of a car, today a car costs about the same amount or a little more than an apartment. But in one case the money is invested in property that is getting more expensive, and in the other case – in property that is getting cheaper. So the expenses have different “output”.

The truth is that there is an argument to be made here. If you buy an expensive and rare model and put it with minimal mileage on a serviced garage storage, it is not excluded that in about 25 years it can double in value. This is what professional players in the retro market often do. But to do this, you need to know well how the market works, carefully calculate the strategy and it will mean that the car from a vehicle has been turned into a museum piece and not used for its intended purpose.

Another difference between an apartment and an auto is the effect of repairs. Generally, repairing a car (unless it is a restoration of a valuable model) means that it becomes cheaper. Whereas a renovated apartment may not just retain its value, but even noticeably increase in value.

When talking about investments, the concept of “risk” inevitably comes up. The risk of serious damage during operation or even complete scrapping of a car is much higher than for an apartment. The most unpleasant thing is that this risk occurs not through the fault of the owner, but simply because someone in the next lane on the highway mistook the gas with the brake. In addition, an apartment is much more difficult to “steal” from the owner.

From the point of view of commercial exploitation, both a car and an apartment can bring the owner money. But renting an apartment will generally be easier and “quieter”, it is not called “passive income” or “investment for the lazy” for nothing. You can go about your business, and the real estate will earn because it is. Whereas a car, in order to earn, will either require the presence of the owner behind the wheel, or one will have to take the risk of giving it to another person to use.

As for the unique qualities of both, the apartment, of course, will not be able to give its owner the freedom of movement and the ability to transport goods. But in a car you can not register. So, both investments cannot compete in their field.
So, to summarize, if it is necessary that the money was placed reliably, slowly but surely growing and could bring the owner income without much effort on his part – real estate seems to be a more reasonable choice than a car.