In addition to financial products, we also offer access to real estate properties as investment opportunities to our clients. Few of our products are exclusively offered by us in the market.
Real estate is considered as the most important and popular among all the asset classes. However, the popularity of this asset category is large because of a reason not related to investment. For those who have bought their own houses, it is the largest expense in life. The word used here is “expense”, and not “investment”. This would be elaborated later, but it is pertinent to mention here that in majority of cases, individuals purchase real estate for self- occupation. This should not be considered as an investment, since selling the same may have a negative impact on one’s lifestyle.
Real estate is considered as the most important and popular among all the asset classes. However, the popularity of this asset category is large because of a reason not related to investment. For those who have bought their own houses, it is the largest expense in life. The word used here is “expense”, and not “investment”. This would be elaborated later, but it is pertinent to mention here that in majority of cases, individuals purchase real estate for self- occupation. This should not be considered as an investment, since selling the same may have a negative impact on one’s lifestyle.
Real estate could be further classified into various categories, viz., residential real estate, land, commercial real estate, etc.
As an asset category, real estate exhibits certain traits, some of which are listed as under:
As an asset category, real estate exhibits certain traits, some of which are listed as under:
- Location is the most important factor impacting the performance of an investment in real estate
- Real estate is illiquid
- It is not a divisible asset
- One can invest in physical real estate, as well as in the financial form
- Apart from capital appreciation, it can also generate current income in form of rents
- In case of real estate, the transaction costs, e.g., brokerage charges, registration charges, etc. are quite high. This would bring down the return on investment.
- The cost of maintenance of the property, as well as any taxes payable must be adjusted before calculating the return on investment, something that many individual investors do not. These expenses are also quite high, and cannot be ignored.
