How algorithmic trading changed my perspective on investing – Part 2

-

Guest Blog by Sushma Bhat, a good friend, one of our early investors and the brain behind this website.

The one with the reality about realty...

"Owning a home is a keystone of wealth…both financial affluence and emotional security.” - Suze Orman

The idea of owning a piece of land or a place to call home on this magnificent earth, was tantalizing. Growing up in a conservative family, my set notion was that bank deposits and gold was the only sure shot way of investing your money. I have already listed the pros and cons of investing in bank deposits and gold in the previous blog. After a few years into my life journey, me and my husband found it very appealing to invest in a home. We explored several options of property investment, starting with investments in India. We considered apartments, independent homes, and farm lands in India for investment. Indian real estate boomed, and was considered lucrative, it eventually proved to be so for a long time on paper.

We also considered real estate investments in the United States, combing through our opinions like apartments, townhomes, independent homes, and farm land, or open land etc. When we were young, we “almost” bought an attached townhome, but got cold feet on the day of signing, and became the “Runaway Buyers” leaving the real estate agent at the altar.

While we did end up investing in a home, it was also fueled by a lifestyle need rather than a need of investment. After analysing many real estate property investments, along with the cost of maintaining those, we quickly realised that the overheads of owning a property just did not justify the investment. While there are many real estate owners who are making tons of money with real estate, as an individual with many responsibilities, I am listing the pros and cons of buying property based on my experience…

Investment Type

PROPERTY IN FOREIGN LAND

Pros

  • Profitable depending on market and regional economic conditions

Cons

  • Double taxation on capital gains procured by selling the property
  • Changing government policies
  • Complicated paperwork
  • Risk of ownership conflicts if not maintained consistently
  • Timely selling can be an issue when in need of money

Investment Type

DOMESTIC PROPERTY (US)

Pros

  • Profitable in the long run if located in a significantly upcoming / high sought after location
  • Can act as your primary home
  • Can build equity
  • Give access to desired school district

Cons

  • High costs of maintenance (cleaning, repairs, insurance)
  • Changing economic scenarios and market conditions leading to changing mortgage rates
  • Timely selling can be an issue when in need of money
  • Selling a property requires further investments in the property

The booming real estate was actually a more lucrative solution in the 1960s and 1970s rather than now.

So based on all of the above, our obsession about property investments quickly faded. 

Stay tuned to see how Algorithmic trading changed my perspective on investing. 


All the above opinions stated above are from the authors personal experience, and is not meant to provide any kind of professional advice or assistance in financial planning or investments.