Indians love property. But does the math support property over equity? Let's find out.
The Numbers
₹50L property: Rent ₹15K/month (3.6% yield). Appreciation: 7% CAGR. 10-year value: ₹98L + ₹18L rent = ₹1.16 Cr total. Minus: ₹5L maintenance/repairs + ₹2L vacancy. Net: ₹1.09 Cr. See our [Rental Yield vs FD comparison](/compare/rental-yield-vs-fd-return).
₹50L in equity SIP: 12% CAGR. 10-year value: ₹1.16 Cr. No maintenance, no vacancy, no tenant hassles. Fully liquid.
Hidden Costs of Property
Registration: 6-8% of property value. Interior/furnishing: ₹5-15L. Property tax: ₹5K-₹20K/year. Maintenance: ₹5K-₹15K/year. Insurance: ₹3K-₹10K/year. Vacancy: 1-3 months/year. These reduce real returns by 2-3%.
Tax Comparison
Rental income: Taxable at slab rate (30% bracket = 30% on rent). Property sale: 20% LTCG after indexation. Equity LTCG: 10% above ₹1L. Equity is significantly more tax-efficient.
When Property Wins
Leveraged purchase (home loan 80% LTV amplifies returns). Self-use (no rental income but saves rent). Emotional value and stability. Tier-2 cities with higher yields (5-7%).
Action Plan
Buy ONE home for living. Invest surplus in equity SIP. Want real estate exposure? Consider REITs (6-8% yield, stock-market liquidity). Use our [Mortgage Calculator](/calculators/mortgage-calculator) and [SIP Calculator](/calculators/sip-calculator).