Answer Book question
Real estate is lumpy, illiquid, costly to transact, and in many parts of Kerala has delivered poor rental yields and flat prices for a decade. Financial investments are divisible, liquid and cheap. Own the house you live in. Beyond that, a second property is a business decision. rent, maintenance, tenants, taxes. not a passive investment.
Real estate is lumpy, illiquid, costly to transact, and in many parts of Kerala has delivered poor rental yields and flat prices for a decade. Financial investments are divisible, liquid and cheap. Own the house you live in. Beyond that, a second property is a business decision. rent, maintenance, tenants, taxes. not a passive investment.
A Gulf returnee buys a second flat in Kochi for ₹65 lakh as "investment." Rent ₹14,000 a month, maintenance and tax ₹4,000, vacant two months a year. Net yield about 1.8 percent. The same ₹65 lakh in a balanced fund would reasonably produce several times that, with no tenants.
Property return = rental yield + price appreciation − costs. Kerala residential yields are typically 2–3 percent gross; appreciation has been uneven. Transaction costs (stamp duty, registration, brokerage) are high. Liquidity is poor: selling takes months.
Gross and net rental yield Realistic appreciation in that locality Transaction costs both ways Concentration. what share of wealth would one property be Who manages it if you are abroad
Ignoring vacancy, maintenance and the time cost of managing a property from Dubai.
Oversupply of flats in several Kerala cities and a large stock of unoccupied NRI houses make the appreciation case weaker than it was in the 2000s.
₹65 lakh flat: net ≈ ₹1.2 lakh/yr plus uncertain appreciation. ₹65 lakh balanced fund at 9 percent: ≈ ₹5.8 lakh/yr expected, liquid, no tenants.
Agricultural land you will farm, a commercial space for your own business, or a house your parents will live in. these are not investment decisions and the comparison does not apply.
Compute net yield honestly Compare against a simple fund Buy property for use, not for "investment" by default
Should I invest my Gulf savings or buy property in Kerala? Gold or mutual fund?
NRIs & returning Malayalis · Kerala Rising Money
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