The other side of real estate investments

Stories abound about wealth created on the back of real estate investments. It is one investment that is seen as providing income, appreciation in value and stability. And to top it all, there are tax benefits. Given all these, you have to contend with the risk of looking foolish if you did not invest in real estate. Not that it ever required too much persuasion to get anyone to invest in it. We are so conditioned to see only the appreciation in value that we overlook the drawbacks. The outcome then is that many portfolios become real estate heavy. And in our comfort with this asset class, we ignore others that may be better suited to our needs.

Are we looking at all aspects of real estate investments when we make a decision to put all our funds there? Read on to find out the harm (and some good) we may be doing ourselves.

The good

The good in real estate investments is the role it can play as a hedge against the vagaries of stock and bond markets. This is because the performance of real estate and other traditional asset classes such as stocks or bonds don’t always move in the same direction. It lends stability to the returns from your overall portfolio even when other investments are performing poorly. But to get that benefit, you need other investments in your portfolio. Not real estate alone. Else your returns will go up when real estate is doing well and fall when there is a downturn, without a cushion from other investments.

Real estate investments provide appreciation in value over time, along with income in the form of rentals. If you have selected the right property, and made the investment at the right time, you are on the right track to earn good inflation-adjusted returns. All of this make a very strong case for adding the asset class to your portfolio. But how much of your portfolio should be in real estate is a decision that you should take only after you look at the drawbacks too.

 To Know More The other side of real estate investments

About Us

MCHI-THANE has always been very clear that fine housing complexes and shopping malls cannot stand in isolation. A great City is the sum total of great buildings, great infrastructure and great people. MCHI has been committed to growth of the real estate sector and is credited with the harmonious growth and rise in quality and standards of construction in Thane City in the past decade.

Its aim as an Association of Developers has been to seek rational rules and regulations which are uniformly applied across the board as this will to a great extent result in speedy construction, cost reduction, fair pricing and a push for better quality standards at par with the developed world, with a high level of transparency.