Real estate investment is not always the best option for all the money you possess.

Real estate investment is not always the best option for all the money you possess.


Real estate investment include purchasing, managing, sale or rental of real estate (immovable property; generally housing and building) for achieving the basic objective of profit gain. The strategy of buying, managing, selling or renting the house or building is known as real estate investment. The investors need to be cautious about the security and return of their investment. First of all he should determine which type of investor he is – risk bearing, or he wants security of return back of capital or he expects regular return from his investment or may consult to real estate agent. Would it be right decision to invest all the money he possess in real estate?


1. There is no actual guarantee of appreciation of real estate as the market goes on fluctuating. Accordingly it may depreciate if it focuses any negative image. Real estate investment can be the best substitute of other sources of investment but not always best investment.

2. Most of the time people appoint real estate agent for investment purposes who charges very high for these services. This would lead to unnecessary increase in cost of the property. Having an agent may cause unnecessary pressure to buy the property before you find if it suits your requirement or not.

3. The investing range is limited whether you want to actively take part in management of the property or hire someone else to manage it. Further additional costs are also incurred in the maintenance of the property. This will lead to certain outflow of cash from the income.

4. It is beneficiary only when the rate of fixed charge is less than return on investment, or can be said that the payments should not overcome receipts from the investment. Thus motive of any venture or business is to earn profits which is uncertain in this case.

5. Large sum of capital needs to be employed in such investments. If people are having relatively lower amount they will not invest in it anyhow in real estate. They may choose other investments such as investing in shares, debentures, etc. They find these investments more attractive than real estate one.

6. Many people had started their career by investing in real estate and the dull market condition is evidence when they all went bankrupt. This only appeals to those investors who are active in risk bearing. Thus it is not the best option for investing as it involve uncertainty regarding investment.


1. Real estate investment includes purchase of property for resale or rental purpose to generate income. This will provide regular assured income to the investor. In case for rental purpose, ownership of the property still lies in the hands of investor and in case of sale purpose the value of the building goes to appreciate during the period.

2. This investment is not time taking. With real estate investing you need not to sacrifice lots of personal time. You may appoint an expert its active manager who will look after the tenant or venture, whatever it may be, on your behalf. Little effort its only required in initial stage after that investors need not to devote his personal time.

3. Real estate investment results to some tangible property which can be pledged out mortgaged to raise funds from suitable sources of finance. Due to this credit worthiness, its ability to be borrowed is high in the market.

4. Returns on real estate are relatively higher than other. The expenses, taxes, or other unconditional losses can be written off easily. Such investments greatly appeals to cautious investors who looks for reasonable safety of their money along with fixed and higher return.

5. The investors need not pay 100 percent down but can pay 25-30 percent down payment. Further it can be financed by bank or other financial institution. This can help investors with lower funds, which later can expand his property with larger number.

6. If the property is financed by any financial institution or bank, the cash flow should be tax free and the investor can wait for the capital gain on the future sale of the property. The further gains can be utilised for writing off tax or other expenses.


Before investing, the investor should classify the various forms of investments and determine which would be more suitable for him. People are quiet sensitive in case of security of their capital and real estate involve heavy risk bearing element. One should not invest all their money in real estate as they may fall shortage of funds which can't be arranged from real estate in very short period because properties cannot be liquidated easily. One should rather invest more money in that class of assets which can be liquidated easily if need for cash arises.
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  • RE: Real estate investment is not always the best option for all the money you possess. -Deepa Kaushik (01/16/15)
  • Real estate is always considered as one of the best investments. Real estate the word itself gives a feel of a huge profit. But again, the real estate is also a mere gamble, especially for those who do not have a sound knowledge of the ups and downs of the process. Investments are of many types, but the best is the one which we have good knowledge of, and we can get into the things with more confidence.

    Real estate is not everyone’s cup of tea. The market fluctuations could not be assessed by everyone. This is where the agents come into play that actually make a good profit out of this source. And the presence of these real-estate agents is one of the reasons as to why the real estate doesn’t yield good hike to the investors. The agents eating a huge share of the profit makes real estate investment as any other mode of investment and it loses the charm of the best investment type.

    The maximum people who invest are the middle income group who want to invest their hard-earned money into something productive which could provide them a assured return on the long term. Many a times the investment is made for the rental purpose to stabilise a regular source of income. But such decisions often locks up the property at one hand and these become one major reason for market fluctuations in real estate.

    Real estate game and investment usually goes on a upper hand in term of huge amount at stake. This requires a highly knowledgeable person who could handle the things with utmost care to get good return out of it. The one who invests should also know when to resale. Without a resale, it could not add to any profit to call it a investment; rather it becomes a source of income through rents. Still, for those who lack proper knowledge of the real estate, or those who cannot afford to gamble with such a huge amount, should definitely search for the alternate options.
  • RE: Real estate investment is not always the best option for all the money you possess. -HArish (01/14/15)
  • Moreover real estate Tsunami has kicked off blind race of urbanization.Forest and furtile land are devasted to bulid big malls, multi storey building e.t.c. 48 percentage population of our counrty employed in Agriculture sectorts. How would one justify the advantage of real estate war to these poor farmers who even don't have sufficient money to get healthy diet every day.
    Many mediocre families gamble to invest a big proportion of their life long saving to get large profit from real estate and unfortunately loose every thing due to market fluctuations.
    So real estate business has its own pros and cons.We need to be very cautious while looking into such oppotunities.A good businees insight and long experince is inevitable to get success in long run.So my conclusion is that we should not imitate other pepople who made thier fortune in this sector.It depends upon plenty of factors so it would be benefitial if we analyse past present and expected future trend of real state market stability with respect to our capital/ investment susecptibility.