For many Indian families, real estate is not an allocation. It is an inheritance, a status marker, a place where surplus cash has traditionally gone, and occasionally all three. What it is rarely treated as is an investment with a return that can be measured and compared.

We think the more useful question is not whether property is a good asset, but whether a particular property is earning its place in the portfolio.

Measure it as you would any other asset

An honest assessment of a property requires the same arithmetic applied to a fund:

  • Net yield, not gross. Rent less maintenance, society charges, property tax, insurance, vacancy periods and the cost of managing the tenant.
  • Total return. Net yield plus realistic appreciation, measured against what the same capital would have earned elsewhere over the same period.
  • Transaction friction. Stamp duty, registration, brokerage and capital gains tax on exit — a meaningful drag that never appears in the conversation about how much a property “made”.
  • Time cost. Tenants, repairs, disputes, documentation. Property is the only major asset class that asks for your weekends.

Applied consistently, this exercise usually shows that property has performed reasonably where it was bought well and held long, and poorly where it was bought on expectation of appreciation alone.

An asset that is not marked to market daily still has a price. Not seeing it is not the same as not having it.

The concentration nobody counts

A family with a home, two plots, a commercial unit and a modest financial portfolio frequently describes itself as diversified. In practice, the majority of net worth sits in one asset class, in one city, exposed to one regulatory environment and one local economy — and often alongside a business that depends on the same regional cycle.

Recognising this does not mean selling property. It means being deliberate about how new capital is deployed, and accepting that the financial portfolio has to do a different job than it would if property were absent.

Liquidity is the real trade-off

Property cannot be sold in part, cannot be sold quickly at a fair price, and is almost never available exactly when it is needed. That has consequences beyond the asset itself: households heavy in real estate need a larger liquidity buffer and greater flexibility in the rest of the portfolio, precisely because the biggest asset cannot be drawn on.

Where it fits

Real estate can be a legitimate, meaningful allocation — for income, for genuine long-term appreciation in a well-chosen location, or for use. It is less suitable as the default destination for every surplus, and least suitable when funded with leverage against an appreciation assumption.

Our approach is to include property in the allocation picture from the first conversation, at a realistic value, with a realistic yield. Investing across listed and unlisted businesses and real estate has been a large part of our own experience — which is exactly why we prefer to hold each of them to the same standard.