There is a penchant to lap up real estate among Indians, because money in real estate is perceived to be safe and secure. Buying real estate, like a house to live in, is not only one of the biggest financial decisions Indians take, it is also one which has a lot of money riding on it. However, the moment one starts to consider putting money in real estate as investments, the dynamics change and could turn risky.
Is real estate investment safe?
<p>The moment one starts to consider putting money in real estate as investments, the dynamics change and could turn risky.</p>
Advertisement
For instance, if one invests in real estate by taking a loan, it could turn into a recipe for disaster with rising interest rates. Moreover, unlike investments in mutual funds or stocks, which are liquid, real estate investing could be illiquid. There is also the issue of money through the non-banking channel, which is most prevalent when it comes to real estate transactions, posing a problem of a different type.
Today, the way new real estate projects are marketed, they sound more like an investment, which will gain and be more profitable than any other financial instrument.
Beware because there are many instances of people feeling the value of their homes having doubled in 10 years or 15 years— something that investments in several other financial instruments also achieve, may be in shorter time frames, yet these are perceived to be unsafe.