Highlights some of the aspects to keep in mind

What is the most important factor while investing in property?

Balancing return with the associated risk is the focal point of any investment decision. Equity and debt are considered to be the mainstream asset, and risk in both these asset classes is strikingly associated with high returns albeit with a greater risk score as measured by volatility. A relatively stable debt investment comes with a larger compromise on returns.


How do returns from property investment fare vis-à-vis those from other avenues?

From the perspective of return, real estate investment in India has garnered superior returns in comparison to other asset classes over a long term. Further, an investment in residential property is generally done with leverage in the form of a housing mortgage. This leverage further increases the potential for earning higher returns since the initial equity contribution is a fraction of the property value.


How can the risk factor the managed?

From the perspective of risk, property investment fares better because asset price generally remains stable. It has been established that an investment in real estate based on sound research can seldom go wrong. Real estate is an asset class where an educated investor can mitigate the risk and enjoy the associated superior returns at the same time. In most cases, investment in real estate is fraught with decision based on gut feeling and tips which result in poor investments. Hence, an investor has to clearly delineate a real estate investment from speculation.


From the growth and investment perspective, zone that have high concentration of business activity at present and projections of meaningful increment in future will have a comparative advantage over others that have saturated on this parameter. Regional growth within a city is anything but even and the direction of such growth is a critical factor in determining the fate of a particular residential property.