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Commercial Real Estate Investment

1. Why Invest in a Commercial Real Estate? Risk has always been a cornerstone of investment. Many investors think of having a flourishing investment portfolio. But one often finds the hackneyed terms of investments like stocks, bonds, ETFs, Mutual Funds & others. This trend of investment recurs because there is a feeling of security and stability involved in these options. But in reality, there is an element of risk involved in these too. Adding real estate to your investment portfolio will give the much-needed edge. Commercial real estate is considered to be a hard asset with a scarce resource. It has an innate value, and its value appreciates over time. Investing in Commercial Real Estate (CRE) can yield benefits like a new source of cash flow, potential long-term appreciation, and proper diversification of the investment portfolio. Let us try balancing our investments as someone has said- don’t put all your eggs in basket. Let us paint a broad picture by looking at the advantages of investing in Commercial Real Estate.  A potential Source of Income: The earning potential for investment in CRE is much more. If you look at the figures, then the commercial property usually has an excellent annual return on the purchase price depending on the area.  Regular & Consistent Returns: The lease for any commercial property is for long term, a minimum of five years. The owner of the commercial property has an assurance of consistency of returns. Also, lease agreements come with a clause of yearly appreciation of the rental value irrespective of market value making it more attractive.  Choice of Tenants: Commercial Real Estate (CRE), with an excellent location invites tenants like banks, corporates, business houses, or retail shop chains. Dealing with corporates always advantageous as there are no hassles towards daily operations as well as chase for rent.  Zero Furnishing Cost: One of the critical advantages of having a CRE Investment is zero furnishing cost of the property. The investor can hand over the property to the corporate tenant who can furnish the property as per their own choice or taste. The reason behind this is branding, which is essential in a commercial space.  Breaking free from Parallel Earnings: Earning from any particular source of investment may tend to become positive or negative if there is some fluctuation in the financial markets. Whereas, investment in CRE is not influenced by the performance for any other source of investment.  A Concrete Physical Asset: Many people believe that real estate is more physical and tangible because you can touch, see, and feel it. In contrast, stocks, bonds, Exchange Traded Funds (ETFs), & other sources of investment may not be as a feeling appealing for some people as they can’t trust them. In case if there is some damage to the structure created on the invested property, then the land is still available for future use.  Tax Benefits: An investment in CRE can very well have its share of tax benefits by reducing or eliminating some capital gains. For tax purposes, a depreciation in the value of buildings over time can help reduce the yearly taxable income. An investor is depreciating his property for tax purposes while appreciating the same for investment. Thus making it a unique feature of investment in CRE.  Evading Inflation: While other investments such as stocks, bonds, or mutual funds bring in diminishing returns during a boom, investment in CRE can easily avoid the long-term impact of inflation. Should everybody invest in commercial real estate? Is it favorable for everybody? The answer to this question is a personal attribute. But we have seen the many benefits of investment in CRE. The investment can be advantageous in comparison to the investment in residential real estate, but it can get a little trickier as well. However, though the investment in CRE is extremely rewarding, it requires a lot of patience and comes with more risks. 2. How to get started in Commercial Real Estate Investing? CREs are usually leased to tenants for operation of their businesses. CRE includes tenants of all kinds like space for offices, banks, malls, restaurants, and convenience stores or supermarkets. It has become an appealing investment option because of its coherent returns, pliable source of income, and growth prospects. Though investing in CRE is attractive, there are some common hiccups, mistakes, and risks involved. Therefore, it is important to you know how to get started and what should you look out for before investing in CRE especially for the first timers.  Financial Ineptness: It is always advisable to keep a track of your capital as well as Your expenses for having an idea of the amount of cash which you can invest.  Realistic Goals: Every investor has a different set of goals. These goals should be realistic in nature considering all the factors and should have a realistic deadline.  Knowledge of Risks: Create a perfect strategy which determines your risk bearing attitude.  Exercise Due Diligence: A prospective buyer can always conduct thorough research on CRE regarding the actual investment opportunity, availability of finance, property inspection, documents, tax returns, profit, and loss statements from the previous owner, survey reports, feasibility study, and so on.  Updated knowledge of Market Cycles with Latest Trends: To invest in a CRE, it is important to learn how the cycle of the real estate market works and the latest trends in the sector.  Proper valuation of Commercial Real Estate: Every CRE investment depends upon the supply and demand, yield from it, and the overall profitability of each sector as all these parameters vary

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Why is Fractional Ownership A Great Real Estate Investment Option

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Why is Fractional Ownership A Great Real Estate Investment Option Fractional property ownership in India is a new concept that allows individuals to become owners of high-quality commercial properties for a modest amount of money. It is slowly gaining momentum as the modern real estate investment paradigm. One of the many things this pandemic has taught us is that we need to invest wisely. Stocks will crash, and investors will have to either withdraw their money at a loss or wait impatiently for the price to rise. Investors recognize the value of diversifying their portfolios and investing in more stable investment groups. With the stock market uncertain and Fixed Deposits rates dropping, more and more consumers are turning to more reliable forms of investment such as real estate. At the same time, fractional ownership was growing in popularity among Indian investors. Partial ownership refers to partial ownership of an asset, most commonly a high-yield commercial real estate asset. Fractional ownership in India is still in its nascent stages and has not been recognized as a mainstream investment class on par with equities and mutual funds, but it is gaining momentum. To determine whether this investment model will succeed in the future, we must first assess the current situation. Although the concept is relatively new, India’s condominium sector is believed to be worth his US$5 billion. Class A commercial properties in India include office buildings, warehouses, industrial and residential areas. As these require significant funds, CRE is limited to his HNI and Ultra HNI only. Middle-class investors now have to choose between highly volatile stocks and low-yielding FDs. Fractional ownership makes investing in prime commercial real estate affordable and easy. This is exactly what Indian investors have been waiting for. This property investment concept allows Indians to own commercial property according to their budget and also helps break HNI’s monopoly in commercial property investment. Fractional Ownership In Real Estate Investments & Its Challenges As the concept is still new in India, investors should take prudent risks rather than jumping in blindly. Lack of a standardized approach forces investors to rely on companies whose terms are acceptable. As fractional ownership becomes more common in India, the government will want to develop investment regulations to address the issue and govern the use of fractional ownership. Until then, both parties must choose mutually beneficial paths. Fractional Ownership as the Future of Indian Property Investment While most of us wonder if fractional ownership will survive in India, other experts believe this is the future of Indian real estate. Make housing more affordableCommercial real estate has always been considered highly profitable, but due to the costs involved, midsize investors rarely enjoy such high-yield investments. Appropriate IRRPartial ownership not only guarantees a sizeable return, but also an increase in income in both rental yields and capital appreciation. Investing in a solid company through a trusted platform, an investor can expect rental yields to increase his 15%. For example, Asset Yantra offers investors top-notch products that can easily capture her IRR from her 12% to her 21%. Hassle free investment Asset growth and steady growth guaranteedCommercial real estate is one of the few asset groups to recover quickly from the epidemic. CRE and office leasing grew in India while other types of property fell on the backburner during the craze. Additionally, multinationals have opened branches in India, increasing demand for commercial real estate, making it a reliable investment with potential capital appreciation and consistent growth. Long term leasing Unlike residential leases, commercial leases are long-term, with multinational and IT tenants typically renting out space for the long term or renewing leases and never delinquent payments. This ensures a steady stream of passive income. Designed specifically for today’s investor, fractional investments are cost-effective real estate investments that require no time or maintenance on the part of the owner. Asset Yantra , a real estate investment platform, further simplifies the investment process by completing CRE due diligence and putting only the best investment proposals on the table. We also adhere to strict transparency and customer-focused practices. Extreme stock market volatility and losses have resulted in a significant increase in investors looking to invest in CREs and other high quality assets. Commercial real estate has long been a staple asset for institutional investors and very wealthy individuals and, based on our experience to date, can also be reasonably considered a recession-proof investment. Individual investors can take advantage of these secure investment opportunities and pursue profits through fractional ownership. Real estate can be very profitable when handled with care. Fractional ownership can be a great and very stable investment for both young people and seniors approaching retirement. It can even be said that this partial ownership remains.

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When is the Best Time to Invest in Commercial Real Estate?

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Commercial real estate (CRE) is typically seen as a long-term investment. Even when the cost of purchasing an item or owning a section or fraction of a property is included, it is still a considerable sum that cannot be overlooked. Given that real estate is a very illiquid investment, care must be taken to ensure that no unexplained obligations arise when entering or exiting a real estate transaction. Thus, time is important in CRE investments, just as it is any other type of investment. You’ve probably heard that real estate investments are a great way to make money. But, if you’re like most people, you may feel hesitant about putting your cash into commercial real estate. The good news is that there are plenty of opportunities for investors out there in the commercial real estate market, even if they aren’t right in front of our eyes. In this article, we’ll cover why it’s important to time your investment decisions correctly and how to do so by learning the market cycles; what happens when they change over time? Do Not Miss: Why Invest in Commercial Real Estate? The cycle of the Real Estate Market Commercial real estate is mostly immune to market instability. That is a significant benefit when contemplating long-term investments. That also implies that, unlike the stock market, you cannot rely on market behavior to anticipate your gains. While rent returns are the incentive to go into commercial real estate investment, capital appreciation is the reason to stay. While engaging in commercial properties, capital appreciation allows an investor to significantly increase their wealth. So, the two most important factors to consider are the demand for a specific type of asset in a given location and the accessibility of similar assets in the surrounding area. The average real estate market cycle lasts 18 years and is divided into four stages: recovery, growth, hyper-supply, and recession. With assets with lease terms of 5 years or more, it is advisable to stay and let capital appreciation work its magic in growing the value of the investment. Do not miss: why invest in commercial real estate? Learn the different markets of real estate There are many types of commercial real estate, and each has its market cycle. Some types are more stable than others, so it’s important to know how long you will be investing in the property. The type of real estate you invest in also matters because each type has its characteristics that affect what kind of return you can except from your investment. If you’re just starting as an investor or want to understand more about commercial real estate properties, these two facts might help: Real Estate is a long-term investment but there are short terms as well (i.e., renting). The real estate market usually peaks around five years after purchase because people need time to adjust their expectations for future growth rates based on previous experience with similar investments or periods during which they rented out their property at higher rental rates than currently available today (which means there’s still demand without supply). Understand what it takes to be a successful investor You should understand that real estate is a market full of opportunities. It’s quite handy to invest in commercial real estate with a good investment platform like Asset Yantra, so you need to consider this option before investing. Being successful in the commercial real estate industry means understanding what it takes for your business to thrive and succeed; not only do you need knowledge of the market but also know how it works as well as possible. Keep your cash invested when you can The best way to get the most out of your money is to keep it invested in commercial real estate. If you’re worries about the market, there are other options like fractional ownership that allow for safe and steady returns- and if you need the cash, it’s also easy to sell them for their amazing liquidity. Buy & Hold, not Flip Buy & Hold is a long-term strategy. You’re buying a commercial real estate property, leasing it out for years, and then selling it when you want or need to move on. This might be 10 years down the road or maybe even 20 years down the road. Flipping is a short-term strategy. You buy an investment property for less than market value, fix up its appearance and make some improvements, maybe adding some new furnishings or changing out the carpeting & then sell quickly at market value (or higher). Build your portfolio over time The best way to time the real estate market is by building your portfolio over time. It’s important to diversify your real estate investments so that if one type of property doesn’t perform well or appreciates, you’re not left with anything but bad news. You can also invest in different commercial spaces in different geographic locations around India by investing through Asset Yantra & then focus on one area at a time as you build up an impressive portfolio over time. Choose your commercial real estate investments wisely so you can get a good return in the right market at the time Instead of focusing on how the broader market acts, an investor should concentrate on elements of commercial real estate that make it valuable in the long run. Look for assets that are well-linked by main roads and popular routes, or that are near seaports and airports. The presence of comparable films in a region, or the development of a large skilled workforce in a certain city or town, is a solid signal that future enterprises may consider locating there as well. Many factors go into making an investment decision, but one thing we know is that it’s best to start with a solid understanding of how commercial real estate works and what to look for when considering investing in this area

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How to Create an Investment Strategy for Retirement Planning

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How to Create an Investment Strategy for Retirement Planning Retirement is an important event in our lives and should be strategically planned. Many aspects need to be considered, such as age at the time of retirement, investments, monthly savings and any possible debts. It also takes advantage of your retirement pension, provident fund, and more. A comfortable retirement requires meticulous planning in advance. Let’s take a look at some ways to successfully save for retirement. Better late than never! While approaching 40 years of age, we need to start making important financial decisions, such as, children’s education or wedding. But that doesn’t mean you should ignore retirement. Start cutting unnecessary expenses and set aside at least 50% of your savings for retirement (or more if you can). A limited time frame requires active wealth accumulation. Consider mutual funds. However, we cannot afford to lose a lot of money at this point. Bonds, bonds and liquidity products are useful for offsetting. Examine your assets to see how they fit into your retirement goals. Plan Your Retirement Through Real Estate Real estate is often a good investment strategy for planning for retirement. Real estate is a high yielding asset class. It is also commonly used as a hedge against inflation. Investing in real estate also has his two big selling points: capital appreciation and rental income. REITs: Real estate investments have two main selling points. These properties continue to appreciate in value and provide rental income. Unfortunately, being a landlord doesn’t seem to be for everyone, as there seem to be as many disadvantages as advantages, and REITs are the easiest way to invest in real estate. They have a special tax position that forces them to pay out at least 90% of their profits as dividends. Investors in REITs receive rental income, profits from home sales, or mortgage-backed loan payments. . REITs offer capital gains, but regular dividend income is their main attraction. They avoid corporate taxes by distributing at least 90% of profits to shareholders. Commercial Real Estate: The most attractive investment approach is commercial real estate. Regardless of market volatility, investing in commercial real estate produces a consistent source of rental income and property valuation. Acquiring commercial real estate can be a very profitable source of income in the near future. Owning a CRE property and renting it out to established businesses to generate rental income is one way to build a guaranteed income stream. Rents are rising every year, so this type of income also helps you stay ahead of inflation. Residential Real Estate: When most people think of real estate investing, they envision buying and renting a home. The challenge is to consistently ensure that tenants pay enough to cover the property’s mortgage, insurance, taxes and alimony. The most important factors to consider are the location of the property and the market rental price. Another advantage of investing in a rental property is the cash flow from rental income to monthly rent. Rental properties can complement your retirement portfolio by providing an additional source of income. Buy a house or two and you might have enough money to retire early. Commercial Real Estate Crowdfunding: Crowdfunding is the pooling of funds for a real estate project by a group of investors. The concept is that many people donate a small amount to the project. Crowdfunding is becoming a popular and affordable alternative to investing in real estate. He wants to invest in a rental home and he believes the perfect property is a 10 unit structure, but he does not have the funds to make this type of investment. Crowdfunding allows you to participate in such ventures without having to invest large sums or own and manage properties yourself. Investors initially benefit from rental income. Until now, investing in CREs has been open only to experienced investors. However, these platforms have recently expanded to allow anyone to participate. As a result, crowdfunding has lowered the barriers to investing in commercial real estate. Commercial Real Estate Fractional Ownership: A new way of owning real estate – fractional ownership of real estate – makes it easier and cheaper for people to take ownership of the real estate they’ve been eyeing for so long. Partial ownership offers investment security, high returns and stable monthly rental income. These are her three hallmarks of a solid retirement plan. According to industry data, the internal rate of return (IRR) for partial investments ranges from 13% to 20%, which is higher than his IRR for most retirement plans. By comparison, programs such as PMVVY and government bonds yield only 7-8%, much lower than commercial real estate yields. In commercial leases, tenants are locked in for 5-7 years with a 15% rent increase every 3 years. As such, fractional ownership is an excellent option for retirees looking for stable rental income. According to industry experts, fractional ownership is a low-risk, high-return investment in any retirement plan. Seniors can invest up to 25% of their assets in fractional ownership for consistent rental income and capital gains. Here are some Retirement Planning Investment Strategies Start Investing for retirement as soon as possible. Diversify your investment portfolio. As tempting as it sounds, don’t put all your eggs in one basket. Invest some money money in a mutual funds, which helps you profit from compounding, even if you’re a risk-averse investor. Save your bonuses, instead of wasting your hard earned money on impulse purchases and holidays. Ask your partner or spouse about their retirement plans and if it’s a good idea to combine them. Each year, increase your investment amount and save in proportion to the increase achieved.

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Long-Term vs Short-Term Real Estate Investment – Find the Right Strategy for Your Needs

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If you put all of your eggs in one basket, you might lose everything in the blink an eye. Therefore, diversification of investment portfolios is critical. Investing some assets in the stock market, some in bonds or ETFs, and some in real estate increases your chances of better rewards and fewer losses. Also, real estate offers plenty of choices to investors for real estate investments ranging from long-term to short-term. Real Estate is a unique asset class that offers investment opportunities for every kind of investors. People can invest in several ways, for whatever tenure they want to in Real Estate. The best part is that with every investment you make in real Estate, the investment is a backed by a physical asset. That’s the reason Real Estate makes it to the portfolio of the most successful investors. Real Estate Investment is one of the best ways to acquire wealth. One big dilemma for an investor is whether to choose a long-term investment option or a short-term real investment. Both options have their benefits and risks. So, understanding and being aware of the pros and cons of both investment options is important to become a successful investor. There are many numerous methods for investing in real estate. Some investors choose to follow traditional methods of buying land or residential properties for capital appreciation and rental income. Read also: Is it the best time to invest in real estate in 2023? Short-Term real estate investments Any investment that lasts for 12 months or less, is a short-term investment. A short-term investment usually provides investors with a higher rate of returns, but with the higher risk. With short-term investments, there is an equal chances of making money and losing money. For properties in areas with a stable increase in value, investing in the short term would be great. Fix and Flip properties are also great for short-term investments. There are also a few other short-term real estate investment strategies to try your hand at.  Rental Properties Short-term rental properties have become a popular way to invest in real estate. Investors can even make more money from short-term rentals than from traditional long-term rentals. Vacation properties are popular short-term rental properties. A will-maintained house in a good tourist area is all you need to earn handsome rental income through short-term investment.  P2P (Peer to Peer) P2P loans are short-term investment options where the investors lend their money for rehab projects. P2p platforms are great for investors to lend their money as they get more interest than any other traditional investment option.  Real Estate Wholesaling Real Estate Wholesaling is a method in which you identify a property, negotiate a fair price, place it under contract without paying for it, and then transfer the contract to another investor for a fee. The goal of real estate wholesaling is to earn without having to own the investment property yourself. Your task is to find distressed properties for sale at a discount or make a deal with the property owner and place it under contract with a contingency. Real estate wholesaling is one of the finest short-term investments since it does not require any capital. Long-term real estate investments Investments that last for more than 12 months are long-term investments. Real-estate considered a long-term option will be the best if you want to avoid high risk. Long-term investment offers a lower, stable return with good appreciation however the risk involved is comparatively less. Long-term investments are also the potential passive income-producing through rentals. In long-term investments, money is tied up for the long term, and the small amount of returns you make over time becomes solid towards the end of the tenure. Long-term investments are also benefited by tax benefits where the returns are taxed lesser than the short-term gains. These long-term investment options to choose from are:  Equity crowdfunding The equity crowdfunding platform is a modern real estate investment vehicle that is highly popular for long-term investments. These platforms enable investors to fund any type of commercial or residential property that generates handsome rentals also with value appreciation. Equity crowdfunding is a reliable source for long-term investments and the investor can fund investments in the comfort of their house.  Multifamily housing Multi-housing properties are a great source of long-term investment. Investing in these types of properties helps in earning a stable passive income along with a good capital appreciation. Multifamily housing investment is a strategy used by investors who want to avoid risk and generate passive income.  REITs (Real Estate Investment Trusts) A REIT is a company that either owns or funds real estate properties that produce income. REITs collect the investment from investors and buy their profitable real estate property the profits generated from these properties are returned to the investors. In this way, the investors indirectly own and earn income from a real estate property but do not have to worry about the properties maintenance. Conclusion No matter how you choose to invest in Real Estate you will never regret investing in it. Investing in Real Estate property is one of the best decisions you’ll ever make. Real Estate is also a great way to diversify the portfolio, you can invest in both options to reduce the risk involved. Asset Yantra is a unique online platform offering high potential real estate to value investors. Based on the investment objective, we offer investment opportunities customized to your needs. Long Term vs Short Term Investment FAQs What is considered a long term rental? Long term rental is letting the real estate property for rentals for a long tenure i.e., more than 2 years. Are short term rentals a good investment? Short term rentals are a good investment option but the risk is comparatively higher than long term rentals. Short term rentals generate higher profits but you should also consider the

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5 Benefits of Investment Management for Your Portfolio

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Benefits Of Investment management is about making the most of your money; regardless of how much money you have in your portfolio, it’s critical to ensure that every dollar is optimized. An investment manager can assist you with this. We are all aware that locating the best investments on the market is a full-time job. It’s no surprise that people pay investment firms to do it for them. Hiring someone to manage your investment portfolio may appear to be a luxury that only the wealthy require – or can afford. However, investment management is about making the dollar is optimized. An investment manager can assist you with this. Firstly, what is investment management? The investment management definition is the practice of managing assets to achieve specific investment goals. The assets under consideration are frequently liquid or classified as securities, but they can also include other commodities. It entails developing long-term & short-term strategies for acquiring and disposing of portfolio holdings. It also includes activities like budgeting, banking, and tax preparation. Investment managers, also known as asset managers, are in charge of growing their clients’ money to help them achieve their financial dreams and goals. They also help with insurance, and portfolio strategy are investment management services. Secondly, what are the objectives of investment management? The goals of investment management differ from one investor to the next. The primary motive of investment management is to achieve financial objectives. Some investment options may have lock-in periods and a high level of liquidity. In this case, clients seek an ideal place to park their funds if they want save for a short period to create emergency funds or funding for personal development, thereby achieving their financial objectives. Another goal of investment management is to reduce the tax burden. Thirdly, how does investment management work? Investment management entails the participation of established financial institutions, which manage your portfolio on your behalf and invest in profitable opportunities that may meet your needs. When you decide to use investment management, you usually begin by signing a consulting agreement with a financial expert or an investment manager. It is also known as a fund manager, asset manager, or wealth manager. Depending on the type of investment you seek or the institution you contact. Following an understanding of your financial portfolio needs, these investment managers devise a detailed strategy for investing and growing your funds over time. Investments in securities, pooled funds, real estate, and alternative assets are examples of this. They can handle your funds once they have your approval on the strategy, costs, and terms and conditions. Fourthly, what exactly is the importance of investment management? Higher Returns: Although cash is perceived to be more secure than stocks, it cannot grow in the long run without investment. Stock market volatility is not always associated with low outcomes. It may provide investors with the opportunity to purchase shares at a lower cost and earn higher returns in the long run. As a result, investment management assists clients in growing their money so that they can get a high rate of return. Achieve Financial Objectives: Investments save money and provide investors with higher long-term returns. However, investing can assist in achieving both short and long-term goals with minimal stress and difficulty. After a time, businesses focus on expanding, resulting in financial stability. Individuals, too, have different financial needs, such as education or homeownership that they hope to meet by saving money. Outperform inflation: Inflation is a significant risk for investors because it reduces current savings and future returns. Rising inflation erodes the value of the principal on income securities. Investment management helps clients outperform inflation and allows them to grow their income without worrying about inflation. For investment savings to grow over time, the after-tax rate of return must be greater than the rate of inflation. It may be tough to find a savings account with higher returns than the inflation rate in today’s low-interest economy. Ensures Consistent Income: The majority of people nearing retirement age rely on investment income as a regular source of income. Life after retirement is difficult for many people because they do not receive a monthly salary to meet their basic needs. Individuals can rely on investments, such as bonds and equities provide regular income in the future after retirement. Resolves Financial Issues: Financial requirements change over time, and emergencies are unavoidable. Early investments result in faster growth of the investment funds. Investment managers assist clients in resolving financial issues, particularly in volatile markets. Clients can tailor their portfolios to reflect changing financial needs and priorities through careful investment management. Individuals or businesses, for example, may be forced to use their savings to deal with an emergency. Fifth, what are the benefits of investment management? Consistent Income: Effective investment management aids in generating a steady source of income. Stocks of companies that pay investors directly or fixed deposits that payout interest are examples of income-boosting investments. Investment management consistently provides consistent income for unemployed, employed and retired individuals, increasing the possibility of economic stability in society. To make money grow: People primarily save money to keep it for future use. Investment plans ensure that people do not outlive their savings. Government bonds and fixed deposits may be ineffective in assisting personal funds to grow. As a result, capital appreciation can only occur with effective investment management, whether short or long term. It is critical to consider the best investment options that provide significant income returns. Although investment funds are associated with high risk, the profit can be higher. Reduces the tax burden: Individuals who pay high taxes on their assets and investment properties have a low income. Paying low taxes lowers an individual’s or a business’s expenses when paying bills for various investment properties. Effective investment management is the best way to keep assets and capital together to reduce the tax burden. Individuals living abroad may discover that tax-efficient assets in their home country are now

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Real Estate NCDs – Who is it for & What are the Benefits?

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Real Estate developers’ non-convertible debentures are a high-return, high-risk investment. Real Estate NCDs get utilized to obtain short-term financing via investors. Real estate Non-convertible debentures (NCDs) are not new products. They are issued by real estate developers and privately deposited with high-net-worth individuals (HNIs). They’ve been operating for three to four years and are highly popular among a specific type of investor due to their high return. The return is higher due to the underlying risk associated with the product. The Economic Times revealed in January that Century Real Estate, a Bangalore-based relator, failed to pay the scheduled interest on one such bond, which was deposited with investors by Kotak Mahindra Prime, a non-banking financial business (NBFC). Delays do occur but then payments get regularized. Also, penalty interest gets paid for the delay. The risks are substantial; especially in today’s market where property sales have halted. These real estate NCDs are a pull investment because of the high yield. So, before you invest, here’s a brief rundown of what you’re getting. Read Also: Is it best time to invest in real estate in 2023 Who is Real Estate NDCs intended for? The minimum investment ticket size for such non-convertible debenture securities is Rs.10 Lakh, making them suitable for high-net-worth people. It is also a fantastic option for high net worth investors with a high-risk tolerance to invest in such an NCD option to diversify their investment portfolio. And the coupon rate and tenure vary from 13 to 22 percent and 1 to 5 years, respectively, interest on the investment is paid monthly, quarterly, semi-annually, or annually. Property developers can raise financing through house buyer loans, and borrowings from NCDs or banks. Also, they can raise from NCDs placed with high net worth customers’ private equity players. In other circumstances, institutional or private equity investors buy NCDs and resell them to HNI Clients. Lodha developers, DLF, Bangalore-based Century companies that have received cash using NCDs in the last year. These NCDs included both unlisted and listed. NCDs can get purchased by investors via NBFCs or wealth management firms. Real Estate private equity funds also invest significantly through NCDs. After collecting cash from customers, a wealth manager starts investing them in debentures using under-construction projects and real estate businesses’ land as underlying assets. An SPV or Special Purpose Vehicle gets established for investing process. Also, the funds are invested via trust established by the NBFC on behalf of the debenture holders. The investment lasts between 1 and 3 years. But, what makes it so desirable? The other assets have been underperforming last four to five years. However, there has been a growing requirements for high-yiel NCDs. These get primarily offered by property developers. NCDs are aimed at the High Net worth Individuals, with an average ticket amount of 1 crore. The prize is a voucher worth 16-20% every year that you may acquire. This type of funding is typically raised by developers in Tier 1 locations. They effectively generate working funds for projects or the organization. Real estate transactions are currently slowing, and banks have hit their maximum credit limit for this industry. As a result, further finance from private placements with high net worth individuals and NBFCs gets welcomed. The call option provides the developer to either pay off this high-cost loan if he has a surplus or excess cash flows. These can be through unanticipated selling surges or when he can again finance the ongoing high-price loan from another NBFC or bank at a cheaper rate and lower his loan cost. NCDs in real estate is only for a few years. As a result, short-term investments such as NCDs offer an excellent chance to create regular income through attractive interest payments Since the underlying security is worth twice more than the investment, it is a safe bet. As a consequence, if the developer issues Rs.100 crore NCDs, the underlying securities should be valued at Rs.200 crore. Although no official numbers are available, market analysts predict that the total amount of outstanding NCDs ranges between 3,000 and 4,000 crores. More issuances are possible. The market of real estate NCDs will develop Read Also: Why Invest In Commercial Real Estate? Risks of Real Estate NCDs? Risks are the other flip side. Essentially, developers will provide property as collateral. Also, the land is actual collateral. The practice is to pay twice the amount of money collected. At first glance, this appears to be a fair safeguard from default. The twist is that the site for which security is supplied is not split into one-crore-rupee parts. In other circumstances, ready goods worth double the loan amount are utilized as collateral, reducing risk. Finally, the trustee must guarantee that your interests are protected. Trustees get called in at the first sign of a default, which might include a missed principal or interest payment.. Institutional engagement alongside people also provides reassurance. However, if an NBFC sells the majority of its holdings to individuals, it is just minimizing its liability and transferring it to you. Do you want to invest in Real Estate NCDs as well? Asset Yantra is a property investment platform that offers services to interested investors. The Sparkle series in Chennai and the Ascend series in Hyderabad are Asset Yantra’s NCD investment products. These have an anticipated IRR of 21%, permitting investors to invest in high-value homes without the hassle of property maintenance. Real Estate Non-Convertible Debentures FAQ’s How safe is an investment in real-estate NCD? Investing in a real-estate NCD is not dangerous but safe since the security, i.e. the current real estate project or/and land held for the NCD issue, is worth more than up to three times the amount generated.

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Is it best time to invest in real estate in 2023 ?

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Investing in real estate can be a great method to build a lot of wealth right now in 2023. Think about real estate as a long-term investment as the housing market is currently out of control. Not only are property prices rising across the board, but mortgage rates have reached their highest level in almost a decade. That means now is a particularly difficult time to acquire income properties or discover cheap homes that may be refurbished and flipped for a profit. If you have the ability to wait it out, investing in real estate may be an excellent way to amass a significant amount of money. Recent rate rises have affected home values. As homebuyers’ affordability declines, many stops trying to buy. We’re seeing “price lowered” banners on listings for the first time in years. There’s more positive news for purchasers. 2023 is a balanced year for housing supply and demand. This is ideal for retail purchasers and rental property investors. No longer a “seller’s” market. Rising interest rates raise the monthly mortgage payment, which reduces homebuyers and lowers property values. Real estate investors want less competition and lower pricing. Real estate investing is a long-term endeavour, therefore perspective is key. In 2020 and 2021, interest rates were very low, hovering around 3%. Recent Fed policies to combat inflation have pushed up mortgage rates. 30-year fixed mortgage rates are 5.5% in July 2022. In January 2022, it was 3.4%. While it may scare some, it’s crucial to see the larger picture. Real Estate investing makes people think of money. You will see a lot of good reasons for this. Real estate is only available in limited quantities. After all, manufacturing more land is impossible. As a result, real estate is nearly universally thought to be a sound investment. However, it must be acknowledged that conventional views on real estate are changing. This certainly has something to do with the economy. It is not uncommon to find people who are afraid of real estate investing. Basic principles for successful real estate investments There are 4 basic principles that you need to understand for successful real estate investment: Location: It is the most important point when it comes to real estate and it is about the most basic aspect of buying a property. It is a good idea to study emerging markets & consult with a real estate agent who has knowledge of the area, do not invest in properties that do not have access to services, good connectivity & basic needs. When talking about the location it is smart to consider: Safety & standard of living Hospitals Shopping centers / Supermarkets Schools / Colleges Restaurants Social & Tourist attractions Asset Yantra provides you the best location. 2. Urbanization Services: Having access to public services is vital to invest in any property; Drainage & sidewalls Streets & sidewalks Electricity Access to clean water Telephone lines Internet access If they do not have any of these services, it will cost you more money or you will have to wait for them to arrive at the property, which will affect your return on investment (ROI). 3. Security: It is advisable to make a study of the area with your advisor to know if there are risks of hurricanes (cyclone), floods, landslides or any other factor that may decrease or put at risk your return on investment or investment as such, for example; you have to pay attention to the rates of insecurity and crime in the area, your real estate agent most have this kind of knowledge of the area, which can help you increase your returns, avoid headaches & even lose in the investment. The safest properties are those that are within real estate projects and planned communities, since they are closed areas, they will give you a sense of community with your neighbors and have 24/7 security services, Asset Yantra provides you the security. 4. Analyze your Target Market: By having your target market well analyzed it is easier to identify the ideal type of investment for you, however, to analyze to your target market & know where you want to go it is necessary that you set your investment goals and objectives, here I leave you a questions that will help you establish your objectives as an investor: Do you want to invest to see short-term returns? Or have a good capital saved for retirement? Do you expect to sell as soon as possible? Do you want recover your capital quickly? Do you prefer to retain your property until it is the right time to sell? Are you looking to take advantage of it to turn it into a boutique, hotel or a property that generates great income? In conclusion principles are something that as human beings we have followed for thousands of years, they have been there for a long time because they have always worked. Myths about Real Estate investing 01 : It’s only for the rich people Fact: We don’t know how or why this myth evolved, dissuading people from investing in real estate. If you are rich, then you can buy a house/office with ease. However, even if you don’t have the required funds, you can opt for a home loan where a financial institution lends around 80% of the property value. You can repay this loan over a long period via affordable installments. 02 : Real Estate Investment are a high-risk investments: Fact: Every investment has some element of risk associated with it. However, of you compare real estate with other investments like stocks, mutual funds, gold, etc., then the risk are much lower with real estate. This is because the real estate market is less volatile than the stock and gold markets. 03 : The prices will always keep rising: Fact: Many people believe that real estate prices never stop increasing. Hence, if they

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Why Invest In Commercial Real Estate?

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Many investors aspire to have an investment portfolio. However, we often see stale investment terms such as mutual funds, stocks, bonds, and ETFs. This investment trend is repeated because these options offer a sense of security and stability. In practice, however, they also come with certain risks. Invest In Commercial Real Estate.The best investment on earth is earth. Adding real estate to your investment portfolio can give you a much-needed edge. Commercial real estate is viewed as a scarce hard commodity. It has an inherent value, and that value increases over time. Massive, Passive & Regular Returns:Each commercial real estate lease is a long term of at least five years. Commercial property owners ensure consistent returns. Leases are also more attractive because they include an annual rent increase clause regardless of market value. Investing in commercial real estate (CRE) offers benefits such as new sources of cash flow, long-term valuation potential, and better diversification of your investment portfolio. As someone said, try to balance your investment – don’t put all your eggs in one basket. Investing in CRE is more financially favorable than residential real estate and provides more financial returns. Get the big picture by looking at the benefits of investing in commercial real estate. Tenant selection:Well-located CRE attracts tenants such as banks, companies, commercial buildings, and retail chains. Doing business with companies is always beneficial because it doesn’t bother you with day-to-day operations and recruiting activities. Good tenants attract other tenants, create a ripple effect and guarantee better returns in the future. Zero setup costs:One of the main advantages of CRE investment is zero property set-up costs. Investors can turn over properties to corporate tenants who can provide properties according to their own choices and preferences. The reason is branding, which is essential in the commercial field. Additionally, each company has its own policy of setting up the right infrastructure for the properties it uses. Tax benefits:Investing in CREs may fully enjoy tax benefits by reducing or eliminating some of the capital gains. From a tax perspective, depreciation over time can reduce your annual taxable income. Investors depreciate their property for tax purposes and appreciate the same value for their investment. This has become a unique feature of investing in CREs. Inflation-proof Investing:While other investments such as stocks, bonds, and mutual funds experience diminishing returns in good times, investing in CREs can easily avoid the long-term effects of inflation. This impact can be avoided as real estate rents can be adjusted appropriately during inflation due to strong economic growth. Should everyone invest in commercial real estate? Is it cheap for everyone? The answer to this question is individual characteristics. However, we have seen many benefits of investing in his CRE. Investing money can be lucrative compared to investing in residential real estate, but it can also be a little tricky. Quality rental properties in up-and-coming locations attract quality tenants and deliver more returns in the future. Investing in CRE is very rewarding, but it requires a lot of patience and comes with more risk. Eliminate parallel earnings:When there are certain fluctuations in financial markets, returns from certain investment sources tend to be positive or negative. In contrast, investments in commercial real estate are not affected by the performance of other sources of investment. Investing in CRE is independent of stock and bond market movements. Specific physical goods:Many believe that real estate is more physical and tangible because it can be touched, seen, and felt. In contrast, stocks, bonds, ETFs, and other sources of the investment may not be attractive to some people because they are unreliable. Get more insight into other factors that can play a significant role in your bottom line. If a building built on invested land is damaged, the land is available for future use.

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