Note: The typical rates of return quoted above are from real estate in developed countries. Developing countries real estate investments typically offer higher rates of return.
Real Estate
- Buying a home to live in it, is not an investment.
- Location is the single most important factor to consider when buying a property.
- Buying a home to rent it out, or to sell it for a profit is an investment.
- Mutual funds that invest in real estate, offer more liquidity as compared to investing directly in real estate.
- Real Estate is not capital protected. Value of a property goes up and down over time.
- Exiting a real estate investment is not easy, because it takes time to find the right buyer at the right price.
- There is also encroachment risk on your property, as well as possibility of the government forcing you to sell the property at book value to build infrastructure projects if the government feels that it is needed to do so.
Remember - Real Estate investments are not liquid, it may take up to 6-8 months to get the right price, when selling your property.