Some of the most common financial problems investors might face with “owning too much real estate.” And by owning, I also mean in the process of owning are High construction costs, delayed projects, high maintenance costs, and huge supply levels to name a few. But low liquidity and high interest rates are what could keep them up at night. is used to describe how easy it would be for you to quickly sell your home at an “acceptable” price. The lower the liquidity, the harder it would be to get rid of your house in an “emergency” situation (job transfer, budget constraints, etc).
The maximum amount of monthly income that should be . It is quite possible that if EMI ranges up to 30-35% of income will still be alright. But if 40% of household income goes to pay mortgage, then it could be a really big trouble. This isn’t always the case, but it is often the case.
No Tax benefit: when the market cycle turns downward then most of the projects gets delayed due to short of funds or builder interests as a result higher cost, severe liquidity issue and The worst part could be you will not even get tax break till possession of the property while you may have to make your time linked payment.
how much real estate do they need in their portfolio? What should be the right product mix? The answer will determine whether or not they are in a “healthy” situation. Increased EMI can force many borrowers to liquidate their other saving to repay some amount of loan which will expose them to improper portfolio diversification. Any deterioration in economy, job or income scenario can force them towards distress sale of property or missing some of their important financial goals.
Increased Cost of maintenance: Maintenance charges, electricity bills, property Taxes, Wealth tax could be some additional expenses on your pocket if property is handed over and the more one spend on housing, then less he can spend on…everything else! This means that most likely you can’t save money, can’t pay off debt, and can’t go on vacation. Having a high housing cost percentage leaves very little room for error. You MUST turn to your budget and evaluate “what if” scenario.