The Real Estate Myth: Is Your Wealth Trapped in Bricks?

If I had a rupee for every time a business owner told me,

“Real estate is the safest investment,”

…I'd probably own a lot of real estate myself😊

But here’s the truth no one tells you:

For most HNIs and entrepreneurs, real estate isn’t just an investment — it’s often theinvestment. And that overexposure can quietly choke your wealth-building potential.

Let’s unpack this.

What Makes Real Estate So Popular?

In India, real estate is seen as a tangible, trusted symbol of success.

It feels safe, stable, even sentimental. It’s what your father told you to buy.

But nostalgia isn’t a financial strategy.

The Hidden Risks of Real Estate

Here’s what most investors overlook:

1. It Lacks Liquidity

·         Selling a property is rarely quick or easy.

·         You can’t use just a room or two when you need ₹25 lakhs for your child’s education.

2. It Doesn’t Beat Inflation Consistently

Once you account for:

·         Stamp duty

·         Taxes

·         Maintenance costs

·         Vacancy periods

…the actual returns are far lower than they appear.

3. It Creates Concentration Risk

·         For many, over 70–80% of their net worth is locked in property.

·         If markets crash or you face an emergency, your financial flexibility is close to zero.

4. It’s Tax-Inefficient

·         Rental income is taxed as per your slab.

·         Even capital gains come with conditions and long lock-ins.

What’s the Alternative?

It’s not about either/or.

Real estate can be a part of your portfolio — but not the only part.

Here’s what smart investors do:

·         Diversify into mutual funds for liquidity and growth

·         Use SIPs to automate discipline

·         Allocate across asset classes — equity, debt, gold, etc.

·         Align investments to real goals — not just what feels familiar

What Should You Do?

Start by asking:

·         How much of my wealth is stuck in immovable assets?

·         Do I know the real return on my real estate after tax and cost?

·         If I needed funds next week, how quickly can I access them?

And then — act.

You need to restructure their portfolios for liquidity, growth, and peace of mind.

Because wealth should work for you.

Not be stuck in stone.