Real Estate Business is high risk, high reward kind of long term investment where the liquidity is demand driven and if you want to hive off property in recession, it is extremely difficult unless it is in the prime location or you are selling it at damn cheap rate. Also the taxation is other major difference.

Here Is Process One Follow Before Buying Real Estate

1. He Will Visit land (plot)first
2. Then watch surrounding locality like who is your     neighbours what is there class (middle , upper, lower. etc )   
3. After watching above 2 points he will look for distance for his land to bus station , airport , hospital ,school etc.
4. then he will take advice from to his broker , his friend , relative etc.
5. after getting satisfied to above all 4 he will then go to owner and start bargain.

at last he will purchase that land. if any one of above condition is not fulfilling he will avoid his purchase.

now think this process in moderate condition take 1 month to complete.   

And When any one have to buy stock he follow this

1.At 9.3 some joker bark @ tv buy ****** will get double in 1 year
2. he call his broker place order @ market price and buy.

It take not more that 1 min to complete procedure and then ppl think that stock market is not good.

if u give same time to stock market as u give to real-estate it will do wonders.   

Investing in RE in India right now is fraught with risks.With prices in metros ruling higher then in sea facing aptts in USA its a bubble waiting to burst IMHO.
The major factor behind this exorbitant rise it seems is the black (no 2) component.With so much black money floating around only avenue to absorb it is gold n real Estate more so after UPA govt established the cutoff date of August 2010 as the date for enquiring info from Swiss banks.This is coinciding with meteoric rise in property prices all over India since Aug 2010.
Wonder who all can afford these bubble like prices in India

Originally posted by catcall Originally posted by FutureBull If you take out the effect of leverage which amplifies return on equity, it would be difficult to beat headline equity index returns unless it is undiscovered locality. This has been my experience. If say somebody has 50lac to invest real estate will require lot of physical efforts to generate 15%+ returns. Equity can still generate 20%+ (buy HDFC bank). I suggest folks to buy real estate on leverage if investible amount is less than 20lac. Point well taken, FB.I am not aware of land appreciation rates in other parts of India, but in Gujarat and Mumbai, where i have been involved in real estate.I am finding that the appreciation rates go atleast beyond index returns, infact more so if you invest in access of the sums you mentioned. In investing in land, I have found that buying land before the NA formalities are completed results in a healthy appreciation simply once the land in NA cleared. Yes I know this involves risks,(as does equites) which is why you need to spend some of your own time (and money) rather than depending upon the broker seller (including accessing govt offices, if required). Your point of "undiscovered locality" is also a effective way... I have found that investing at the start of any land sale project and then getting out once it is fully sold out gives good returns. I've currently a 80/20 allocation between real estate and equites and concentrated my equity portfolio on safe bets (incidentally HDFC Bank is one of them) Opinions are welcome!

I don't know much about real estate and my only real estate is my house. But Kerala - where my ancestors are from - has seen significant appreciation in land prices over the last 2 decades. In Kerala even 21 years old boys know the price of land. Everyone is a RE consultant. I know a very close family friend who invested 1.25 lakhs in land and built a house on the plot (about 7500 Sq.Ft land). Now he says it quotes at more than 1.2 crores. That is an appreciation of 100 times which is about 18 % pa. Now this is extremely good but people will not consider the cost of the house built which would be at 2L at 1984 price. Then the property taxes, the cost of finding the renters, the brokerage, the maintenance, the cost of travel to take care of the property, etc.

When we invest in a company the company sets aside some part of the profit as depreciation, but a RE investor does not do that. So for ordinary RE investor there are lots of hidden costs which is not considered when total returns are considered.

Now it is my opinion that even 15% growth will not be sustainable but for the money sent to Kerala by expatriates from the Gulf. Good companies can give much better returns because of the productivity factor.