Cashing In On Real Estate

The first and foremost thing to keep in mind before adding real estate to the investment portfolio is that “it is not an extremely liquid investment.”

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Having said that, an investor can opt for financial instruments like REITs (Real Estate Investment Trust) which allows them to take exposure in real estate, albeit indirectly! REITs are highly liquid in nature. Few of them are already listed and traded like shares in the country’s stock exchanges, but their ticket size is small. Therefore, retail investors with small investment budgets can also take exposure to these instruments.

High Net Worth Individuals (HNIs) and ultra HNIs have another route of indirect exposure the Alternative Investment Funds (AIF). Though liquidity in AIFs is comparatively lower than REITs, the risks, as well as rewards from AIFs, are much higher.

Coming back to the option of holding residential property in one’s investment portfolio – one must keep in mind that the largest chunk of the investment goes into residential real estate.