Prashant Kishor's ₹73 crore property portfolio: When does owning real estate become too much?

The election affidavit of Prashant Kishor, the founder of the Jan Suraaj Party, offers a crucial personal finance lesson: the significance of having a well-diversified asset allocation strategy. Without a proper investment strategy, ensuring growth is difficult.

His portfolio also raises a fundamental question—how much is too much when it comes to property, and how should investors plan and divide their wealth across real estate, equities, bonds, gold and other asset classes ?

It is important to note that Kishor has declared non-agricultural land with an approximate current market value of ₹ 9,75,00,000 and residential buildings, including inherited properties, with a current market value of ₹ 73.87 crore, as per data in his official election affidavit.

Furthermore, Kishor’s residential property portfolio comprises four self-acquired properties purchased between 2016 and 2024, with a combined current value of ₹ 49.5 crore. He also holds inherited assets valued at ₹ 14.62 crore, including properties in Ghaziabad, Buxar and ancestral property in Rohtas.

For investors, this data highlights the need to diligently look beyond an asset's absolute value and consider its share within the overall portfolio. The key is to strike the right balance between real estate and more liquid assets such as bonds, equities, and gold, based on one’s long-term economic goals, risk appetite, and investment horizon, to ensure that an investor's portfolio continues to grow over time.

Ownership of a home is an important financial objective; however, concentrating too much wealth in property can create a situation in which an investor is asset-rich and cash-poor. The question, hence, is not simply how many properties an individual owns, but how much of one’s overall wealth is tied up in them.

Shashank Udupa, Founder - Vayu Capital & SEBI-registered research analyst, explained this aspect in detail. “Having your home as a major portion of your total net worth creates massive liquidity issues. Whenever there is a need for any kind of cash requirement, the only way is to liquidate your house's equity by doing a home mortgage, which is not safe in many cases. Ideally, for a person trying to have a balanced approach , we believe that a 50% real estate and 50% equity+debt split is ideal. This takes care of long-term compounding + near-term liquidity requirements,” Udupa opined.

Diversification of net worth should be based on an individual’s overall net worth across asset classes such as gold, equities, bonds, real estate, and others. It should not be done primarily on the basis of the number of properties an individual owns.

The appropriate real estate allocation for an individual investor depends on income, age, financial goals, liabilities, and risk appetite.