Real Estate Investing Archives

The Impact of Coronavirus on the Indian Real Estate Sector

Real Estate Investing | May 13, 2021

Real estate is one of the most globally recognized and prominent sectors. The growth of this sector is mainly because of the growth in demand for residential properties due to the increase in high standards of living amongst the people along with the need for the corporate environment and office space. Real estate has been considered one of the best sources of passive income traditionally due to the generation of regular rental cash flows. According to the reports, the real estate market in India is expected to reach a market size of US $ 1 trillion by 2030 from US$120 Billion in 2017 and contribute nearly 13% of the country’s GDP by 2025. The impact of the coronavirus was such that it brought property transactions to a near-halt last year when the nation went into a complete lockdown between March and June 2020. Since then, the market has taken several steps towards recovery, and just when it seemed the revival was not far, the country has been struck by a second wave of the coronavirus this time far more fatal. Experts say the recovery of the realty market in India could now prolong until 2022. India will be the biggest beneficiary for big investors and global companies to come to India. Since China has lost its trust from investors due to rumored conspiracies, there are chances that the investors might shift their focus towards India. The second wave of COVID-19 would have little effect on the industry because, after the first lockdown stage in April/May 2020, people realized the value of owning a home for themselves. The collective experience of the year bygone has taught people the importance of owning a property. Hence, last year, once the restrictions were lifted, people started investing, shedding the hitherto ‘wait-and-watch approach. It’s a really good time for those who are looking for investment options as the rate of returns is maximum in this sector. Also, the banks have reduced the interest rates on home loans to attract customers. We have found that buyer’s enthusiasm to own a property is even higher compared to the last few months. Real estate investing in 2021 is an early bird opportunity since only a few retail investors are aware of the golden opportunities that exist. Even though Covid has currently slowed other high-return investments, real estate still finds scope in investors’ minds. Thus, it is wise to grab this opportunity and invest now. NRI investment in real estate amid COVID-19 The primary purpose of Non-resident Indians to invest in real estate has been for earning rental income. However, the uncertainties fueled by the pandemic across the world has motivated the NRIs to own a home in India as well. With deposit rates falling in the range of 6-7 percent, and the declining value of the rupee against the US Dollar, the NRIs are actively looking for investment opportunities in the Indian real estate market. NRIs are increasingly investing using the online platforms as the pandemic has fostered the use of virtual visits, hassle-free property bookings and this has enabled the NRI community to browse, select and invest in real estate online. The NRI investment in Indian real estate in FY 2021 stood at $13.3 billion which is expected to reach $15 billion in FY 22. NRIs who have invested in prime cities like Pune, Mumbai, Hyderabad, and Bangalore have preferred to stay invested. In fact, Bangalore has emerged as the most favorite destination for NRI investors. When you begin your investment journey into real estate, make sure you seek the advice of experts in this industry who can guide you in the right direction.

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Millennial Guide to Real Estate Investing: How to Start Investing in Real Estate at Young Age?

Real Estate Investing | February 2, 2021

Why invest in real estate at a young age? It’s never too late to begin investing and planning for the future, but the sooner the better. One main advantage to investing when you are young is you will be able to make a substantial amount of money over long term by taking advantage of the monthly cash flow and excellent appreciation in asset value because the property value is based on rents increasing and not just property values. It’s great to dream about the riches you can make from real estate no matter how young or old you are, but it’s critical to enter into the right property investment. Most of all, you need to enjoy the ride of real estate investing and not be afraid to take the opportunity because it truly is a great experience. We educate and help the millenials, the generation next and every other individual to invest in the right kind of real estate investment that generates tremendous wealth. Whether you got your first job or just started working, qualified working professional, an entrepreneur, businessman, high net worth(HNI)/ wealthy individual, we have an investment that suits every investor. We also help you build a powerful real estate portfolio with a unique & diversified mix of our top asset categories. Investors can build a portfolio with just 50 lakhs with a combination of unique assets that gives a consistent cash-flow in terms of monthly rental income and also multiply the investment using our unique short term investment strategy that will yield 30-60% in 2-3 years time. Simple reasons why investing income producing real estate is an excellent choice for protecting and growing your wealth: 1.Dependable Income Stream/ monthly positive cash-flow One of the biggest benefits to income producing Real Estate Investments is that the assets are generally secured by long term leases which provide a regular and dependable income stream that should produce positive cash flow higher than any other investments. 2.Multiply Asset Value through Leverage Another important characteristic of income generating real estate investing is the ability to place debt/loan on the asset which is several times the original value of the asset. This allows you to buy more assets with less money and significantly multiply asset value. 3.Debt Reduced by Property Income The debt on the property will be reduced by the rental income of the property’s net operating income, NOI. NOI(Net Operating Income) is the gross income less all expenses before loan interest/EMI. The NOI will sufficiently fund the loan interest/EMI payments thereby reducing the debt balance and creating equity. 4.Inflation Hedge Real estate investments have historically shown the highest correlation to inflation when compared to other asset classes . Generally speaking, when inflation occurs, the price of real estate, particularly multi-tenant assets will also rise. 5.Physical Asset Income-producing real estate is one of the few investment classes that as a hard asset has meaningful value. The property’s land has value, as does the structure itself and the income it produces has value to future investors. Income producing real estate investments do not have red and green days as does the stock market. 6.Tax Benefits This asset gives you multiple tax benefits that no other form of investment in India can provide, such as : Under Section 24 : 30% of entire rental income from this asset + entire interest paid on home loan can be deducted from your taxable income. Section 80C : Upto Rs.1,50,000 per annum can be deducted from your taxable income for principal repayment on your home loan. 7.Pride of Ownership Properties located in the hottest IT, Commercial, Spiritual & Tourist Destinations of India The right property in the right location with right tenants and right ownership mindset can produce a tremendous pride of ownership factor that is highest among all asset classes. 8.Appreciation of Asset Value Income producing Real Estate Investments have historically provided excellent appreciation in value that meet and exceed other investment types. Properties historically increase in value as the net operating income of the property improves through rent increases and more effective management of the asset. 9. Indestructible Wealth: Income producing Real Estate produces passive income for life. It is an imperishable asset, ever increasing in value. It is the most solid security that human ingenuity had devised. It is the basis of all security and the only indestructible security. Rich and ultra wealthy invest in real estate directly. They own multiple residential or commercial properties. Steady capital appreciation of their real estate property is common. But what makes the property investment so attractive is its capability of generating stable short term income. The short term income is generated in form of “monthly rents“. The rate at which the rental income grows, generally beats inflation in long term. This is specially true for Metro, Tier1, and Tier 2 Cities. As the monthly yield of property grows, this also pushes the overall property price up. This dual effect (of assured rent and value growth) makes the real estate sector generate unparalleled returns, unlike any other asset. How do you start investing in Real Estate? Many a times, the biggest challenge in real estate investments is not knowing where and how to start. You may have an abundance of funds and a keen desire to start and build a real estate portfolio, but if you don’t have the right knowledge and start at the right place and in the right way, chances are you’ll end up with a bad or unprofitable investment. One must have a long term strategy to invest in real estate. We have listed a series of steps below which will brief you on how you can start off on your journey of wealth creation in real estate: 1) PURPOSE of Investment : The first question you need to ask yourself is whether the investment is for self-occupation for you and your family or is it a pure investment for

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Monthly Rental Income Assets in India

Real Estate Investing | January 19, 2020

Invest in Micro-Commercial Assets to Earn 4 Times More Rental Income than Normal Apartments or Villas Traditionally, people buy a 2 or 3 BHK residential apartment or a normal villa and then rent it out. But such rental returns from the residential property are very low in India, ranging from 2.5% to a maximum 3% irrespective of which city or area you invest in (infact in places like Delhi and Mumbai, returns are much lower at almost 1.5% due to high property Prices). On the other hand, if you can invest a much higher amount of Rs.5 to 20 crores and buy a commercial asset such as a shopping mall space, office spaces, etc, you can earn higher returns of 7% to 8%. But not everyone can afford to invest such large sums of money and even these returns of 7% to 8% remain fixed for a long period of time and do not grow significantly with time. And apart from earning such low returns, you also have the risk of tenants vacating, difficulty in finding new tenants, etc and hence income from such assets is not always Guaranteed. There was nothing in between these 2 categories so far and hence people had no choice but to be content with such low returns. A Solution to This Problem The best option available for Investors Today: Now for the first time in India, with these branded serviced hotel apartments, you can enjoy the best of both worlds, which is the high returns of a commercial asset, with the affordability / low tickets sizes of residential apartments. Through these serviced hotel apartments, you can earn annual returns of 10% to 12% in the beginning which will almost double to 20% in 15 years time, on an investment ranging from Rs.30 lakhs to 90 lakhs payable in installments over 1 to 2 years. This means almost 4-5 times greater income than normal apartments or villas. How Does This Work? This asset is a serviced hotel apartment concept that generates high monthly income in the following manner: Step 1 You invest in a fully furnished, fully air-conditioned and fully serviced Studio / 1 BHK / 2 BHK hotel apartment that will be built to the standards of a 3 star hotel, which is then managed on your behalf by a leading hotel apartment operator of India and is marketed to top Indian corporates and MNCs as a corporate serviced hotel apartment. Step 2 This operator already has formal rate contracts & strong relationships with over 200 leading IT companies / MNCs and international travel agencies and hence regular and healthy demand for rooms is a foregone conclusion with the lowest risk to you, as an investor. Step 3 At the end of each month, the total GROSS rental income of the ENTIRE tower (that is, total revenue from all the rooms, before any operational expenses are deducted) is shared in a 50:50 ratio between you (the investor/owner) and the operator. Step 4 This translates into rental ROI of 10% to 12% p.a. in the beginning which more than doubles to almost 20% over the 20 year lease period (which is renewed in multiples of 5 years thereafter). This means that a Rs.45 lakh unit will fetch you Rs.40,000 per month in the beginning on average, which will grow to as high as Rs.80,000 per month in 15 years and will keep increasing throughout the lease period. This is 3 to 4 times greater than the average income of normal residential apartments or villas.

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