Advantages & Disadvantages of Real Estate as an Asset Class
Real estate is one of the major asset classes — and the one most Indian households already hold the most of, often without a conscious allocation decision. This guide sets out its genuine advantages (dual utility as both investment and home, two return sources via rental income and appreciation, accessible home-loan leverage, and some long-horizon inflation linkage) against its less-discussed disadvantages: illiquidity and high round-trip transaction costs, high ticket size creating concentration by default, hyper-local/location-specific risk (unlike a diversified index), ongoing costs and vacancy risk, title/legal complexity even with RERA, opaque valuation versus real-time market pricing, and the tax complexities covered in tackl.finance’s tax series (capital gains grandfathering, TDS on purchase). We close with REITs as a partial alternative — addressing liquidity, ticket size, and diversification, while not replacing the dual-utility, leverage, or tax benefits that come specifically with owning a home.