'You can’t liquidate only the bathroom': CFP warns against real estate for passive income

Real estate may seem like a reliable source of passive income, but financial planner Kirtan Shah warns it comes with more risk—and less reward—than many investors realize.

In a candid LinkedIn post, Shah, a certified financial planner, broke down why he advised a prospective investor against sinking ₹4 crore into property for rental income.

The math? A ₹4 crore property generating ₹1 lakh in monthly rent yields just 3% annually—a figure Shah argues doesn’t justify the risks. “There is a maintenance cost, the property may not always be occupied, and in many cases, you lose one month’s rent to brokerage,” he wrote.

On top of that, rental income is taxable, the property is illiquid, and the investment adds significant concentration risk to a portfolio. “If you want ₹10 lakh, you can’t liquidate only the bathroom,” Shah quipped.

He also pointed to recent data from the Reserve Bank of India, which shows real estate returns averaged just 4% over the last decade—a figure that undercuts the common perception of property as a high-growth asset.

With real estate prices in cities like Gurgaon cooling off and Bangalore’s market remaining notoriously tight, Shah’s warning comes at a time of increasing scrutiny around property as a viable investment avenue.