Considering the stagnant property prices over the past 12 years, would it be advisable to sell 5 crore home and relocate to a 1 crore home in order to invest in mutual funds?"

Every critical decision is influenced by past and present circumstances. For instance, if you possess a 4 crore home but lack substantial income sources beyond that, it would be prudent to consider alternative housing options and strategically invest the remaining funds.

Assessing Your Financial Situation:

Before making any decisions, it's essential to evaluate your financial situation thoroughly. Take into account your income streams, existing assets, and future financial goals.

Strategic Allocation of Funds:

A significant portion, around 60%, could be allocated to secure Fixed Deposits (FDs) for minimal risk, ensuring stability and liquidity. Approximately 30% could be diversified into mutual funds, offering potential growth opportunities while spreading risk. The remaining 10% might be allocated to more speculative ventures such as trading, providing the potential for higher returns but with increased risk.

Consider Property Market Dynamics:

While this advice aligns with my current knowledge, there may be even more optimal solutions available. Consider the current property market dynamics, including trends in property values, rental yields, and demand-supply dynamics.

Retaining Property vs. Exploring Alternatives:

Alternatively, if you possess substantial income streams, retaining the property could be advantageous. Especially if it is situated in high-demand areas like Mumbai, where property values tend to appreciate significantly over time. However, in cities where property values stagnate or decline, selling might be the more favorable option to unlock capital for alternative investments.

Consultation and Professional Advice:

It's crucial to seek consultation from financial advisors or real estate professionals to gain insights tailored to your specific circumstances. They can provide personalized guidance and recommend strategies aligned with your financial objectives and risk tolerance.

Conclusion:

In conclusion, making informed financial decisions regarding property ownership and investment requires careful consideration of your financial situation, market dynamics, and long-term goals. By strategically allocating funds, assessing property market dynamics, and seeking professional advice, you can maximize returns and achieve financial stability. Remember, every decision is unique, and what works for one individual may not necessarily be the best option for another. Therefore, take the time to evaluate your options thoroughly and make decisions that align with your objectives and risk appetite.