Dhirendra Kumar talks about the pros and cons of investing in real estate
Is it advisable to invest in land or a house?
- Dr K Santosh Kumar
One should be aware of all the complications or pitfalls of investing in land or a house. While one should definitely buy a house, don't stretch your borrowing limit. Buying a home could be very meaningful for somebody who will live in that house to help save on the rent. Also, for most people, if you have no other savings or no other way of accumulating wealth, buying a house can turn out to be a very meaningful way to accumulate wealth.
But otherwise, if you're looking at it from an investment point of view, I would say that real estate comes with its own set of problems. Firstly, the ticket size is huge. Secondly, there is a maintenance cost, and you have to keep an eye on that. It's not as simple as buying a mutual fund and selling it at one go anytime you want to.
However, suppose for any reason you have committed to investing in real estate or for some reason you have to. In that case, follow the simple principle that the value of houses depreciate while that of lands appreciate. Hence, go for land.