The real-estate market is a high-risk market that has been aggrandized purely by how unexpectedly large its returns can be and is dependent largely on perception. For instance, someone who bought a house in Whitefield in Bengaluru in 2005 has seen his apartment's price quadrupling to give huge returns. However, many industry experts and portfolio advisors suggest that even unexpectedly large returns are on expected lines when one factors in inflation, increasing guidance values and more. Keeping tabs on ready reckoner rates in Mumbai for two decades, for instance, can give you a fair idea of what to expect in the next ten years or so. In fact, the most unexpectedly great returns are those that are made in a short span of time, such as 5 or 6 years. This obviously involves huge risks as well.
Investing in real estate
Investing in real estate involves a different approach from buying a house. In many cases, advisors say that people who buy houses rarely sell them, due to the emotional value of owning a house. Investing in real estate on the other hand, involves having more flexibility and exercising practical decisions. Unlike other investments, real estate involves a lot of time, money and commitment and the extra returns justify the extent of the investor's involvement. Unlike the stock market, which shows a point-by-point and day-to-day performance of the market, the real estate industry is decidedly more difficult to track. Real estate investment also means less liquidity and the profits that are made are not booked immediately as in the case of equities or selling stocks.
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