On Wed, Apr 9, 2014 at 9:40 AM, SS <[email protected]> wrote: > The argument against real estate in the article indicates that tax > structures in the society the author lives in are unfavourable for > people who attempt to hold real estate as an asset. Right now that is > not true in India.
My argument against real estate is that various costs are not factored in by people when they talk about it being an "investment". - Actual costs: for most people on this list (e.g), buying real estate is not done with cash on hand, but with a loan. And rating its performance as an investment has to be done after taking the costs of the loan into account, which can easily double (or more) the cost of the asset over the tenure of the loan. - Opportunity costs: Real estate typically (say over a 10+ year period) lags behind the stock market in rate of return. Given inflation rates in India, it probably lags behind inflation as well - making it a net losing proposition. (This is an aggregate claim - please don't respond by quoting individual examples) Also, something is only an investment if there is a willingness to convert it into money, which does not typically seem to be the case. Udhay -- ((Udhay Shankar N)) ((udhay @ pobox.com)) ((www.digeratus.com))
