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Friday, July 24, 2020

BITCOIN VS PROPERTY, WHICH INVESTMENT IS MORE PROFITABLE ?



Nowadays investment is not a strange thing anymore, especially in the midst of unpredictable global conditions, then a currency that is always inflation makes investing or saving an asset a matter of concern for a comfortable life in the future.

One investment that always has an interest from time to time is property, this investment is usually associated with ownership of land, apartments, houses or anything related to the building. This is reasonable, because in reality property prices can increase many times over the years, especially if you choose a strategic location.

Property investment is still a favorite for baby boomers or those born in the 60s, but reported by Fintech Magazine, for millennials (1991-1996) and GenZ born after that era chose Bitcoin as an investment tool.

What is Bitcoin? You can find the answer here

Then what is the advantage of Bitcoin investment compared to property and how do the profits compare?

You can find the answers to Bitcoin vs Property in the following article.

The Benefits of Investing in Bitcoin
Cryptocurrency, the most popular of which is Bitcoin. This is one of the latest investment options available. This digital currency acts as a global medium of exchange as an alternative to money. Bitcoin is supported by blockchain technology.

Limited Amount

One of the great benefits of bitcoin investment is that this currency is limited to only 21 million. So when this supply runs out, then Bitcoin will no longer be produced. The price of Bitcoin will continue to increase along with the increasing scarcity of Bitcoin.

Small Capital


To start this investment you don't need big capital like property, because you don't need to buy 1 BTC to be able to invest, you can start from Rp 50,000 or Rp 100,000 you can already have a small amount of BTC and can continue to be added like saving. That way this investment is also affordable by various groups, including students.

Avoid inflation

Because Bitcoin is not regulated by a particular country or institution, Bitcoin is protected from inflation. Price movements related to the law of supply and demand. In addition, Bitcoin does not need monthly maintenance like property.

However, as large as all these facilities, there are some shortcomings of this asset. Bitcoin is an intangible asset, there is little room for mistakes in exchanges. The currency is fully digital, which makes it open to cyber attacks especially if you store it on an exchange that is fully connected on the internet.

But if you keep it in this cold wallet, security will be sufficient. Also, even though there is only a small amount of Bitcoin, there are many other types of cryptocurrency available that can enhance the market

Advantages of Investing in Property

Property is also a real investment, you can withdraw money from it and return its value. With the right purchase or sale, you can bring in money while giving value to assets that can be sold. The benefits of this investment include:

Tangible Assets

Property is an asset that you can see and treat directly, you will also find out if your assets have been damaged and can request repairs with insurance claims

Multipurpose Investment

You can rent it out so that you get additional income every month from fees given by others.

Rising price

Property so far has always had a price with a positive trend every year the price rises due to inflation and market forces. Even assuming property can increase 20% every year, so property prices will be more expensive every year especially if the chosen location is strategic.

But, there is a drawback for property investment, which is a large maintenance burden, capital-intensive investment which means the greater the capital owned, the greater the benefits that can be obtained. Furthermore, property investment is not so affordable because you have to provide enough savings to buy a property.


In addition you will still be charged with taxes such as PPH and BPHTB. The amount of PPH tax is 5% that is imposed on sellers and 5% on BPHTB is imposed on buyers, so the monthly or annual expenditure can increase.

Comparison of Investment Profits in 10 Years

After knowing the advantages to the shortcomings of these two assets, then now is the time to compare the benefits that can be obtained if we invest in Bitcoin property.


In 2019, reported by Kompas.com the price of a single housing unit is in the range of Rp. 500 million. We will buy the house using a mortgage (KPR), as reported by Bank Indonesia data in the third quarter of 2019, the number of house purchases using the KPR reached 76.02%.


Here is an example of a KPR system calculation using Bank BTN. We will take the property at a price of 500 million without subsidies. So the initial down payment is IDR 75,000,000. With the type of flat interest rate, and an annual interest rate of 8.99%

After general calculations using simulations provided by Bank BTN, we had to spend up to Rp112,975,600 in the first payment. This includes upfront costs, notaries, insurance, and others. Then the 10-year installments will be paid in nominal terms of IDR 6,725,600 in 120 months and the house will be fully privately owned.

If it is simplified, then at least you must have a minimum capital of IDR 113 million, with a stable salary in the range of IDR 12,000,0000-IDR 15,000,000 so that installments and other needs are still met. A very large capital, with returns that are not too fast. Because if you want to sell it back, you should at least wait another 10 years.

Meanwhile, let's take the highest Bitcoin price comparison in 2019 which costs $ 7,335.29, equivalent to Rp108 million. So, with the same capital you can get 1 BTC without having to pay in installments. Then, just save until waiting for the price to rise. In 2020 the price of BTC is in the range of $ 9,000, equivalent to Rp.133,000,000.

It means, in one year you will get a profit of IDR 25 million if you sell BTC that you bought last year and sold in 2020. But if you buy property, then you actually have to spend money on installments for the next 10 years.


In conclusion, Bitcoin vs Property in terms of capital will be more profitable if investing in BTC than property. Because you have been able to buy 1 BTC, while on your property you have only made an initial payment, and within one year you have not seen any significant benefits plus there will be additional costs for maintaining the house, whereas BTC in one year has been able to rise and without any additional money.


Profit in 10 years if it is assumed the property will rise 20% / year and you will pay off the mortgage in January 2030.

According to a report from the Crypto Research Team the price of BTC in 2030 is predicted to touch $ 397,277, if it is translated into the current exchange rate, the value will be 5.8 Billion Rupiah.

In other words in terms of capital and return of profits, then Bitcoin vs Property is more profitable than BTC property, and you can still buy property with the benefits you get from Bitcoin.

Disclaimer

This article is a comparison article between Bitcoin vs Property investments which are summarized from various sources to provide information and estimates of which investments are more profitable. This article is not a suggestion or suggestion in investing, because any investment must be based on personal awareness and ability without any element of coercion.

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