Why Real Estate is a Highly Flexible and Profitable Investment?

When it comes to investing with an eye on earning a sizeable return in the future - Gold, Equities and Real Estate are generally considered more profitable than others. However, each comes with their own unique set of characteristics, risk factors and advantages. Gold is a stable investment but yields lower returns compared to equities and real estate. Equities, on the other hand, provide higher returns in intermittent periods but are sometimes highly volatile and involve a high amount of risk.

As the old adage goes, “The best investment on earth is earth”. Real estate investment is comparatively safe, and comes with assured returns as long as investors plan their investment astutely. This means carefully considering locational trends, upcoming developments, and establishment of hubs that generate employment and then make an appropriate investment. Real estate as an investment takes time to mature. Real estate can generate a regular rental income and can also generate long term returns, as their value matures with time.

In the year 2011, when the stock market tanked by almost 25%, real estate grew at a steady rate, and prices rose in 9 out of 15 metropolitan cities in India showing how it’s a better investment than equities and even gold. As long as the Indian economy continues to grow, real estate would continue to be valued; therefore property prices are likely to rise. We look at the various ways investors can benefit from investing in the real estate market -

• Attractive Tax Benefits

Tax benefits are available for investments made in real estate. Section 80EE covers tax rebate on the interest of home loan for ‘first time buyers’. It also provides an additional deduction of Rs. 50,000 over and above the tax deduction of Rs. 2 lakh under Section 24 and Rs. 1.5 lakh under Section 80C

• Better Sense of Control

Owning real estate property equips one with a greater sense of control over the performance of the real estate asset, to an extent. Investors can decide on furnishing or renovating the property in order to make it an attractive offering if the investor wishes to sell, lease or rent out the property.

• Convenience of Rental Income

This is one of the safest investments which can generate regular income that gives lifelong returns while simultaneously enhancing the value of the property over time. However, it is important to have a property with the right attributes to be able to avail the desired benefits.

• Diversified Portfolio

An astute investor is aware of the need for maintaining a diverse portfolio in order to minimise the risks. Real estate, being a palpable asset, works as a trust-establishing factor in the portfolio thus allowing an investor to attract risk-averse investors

• Economic Growth Enhances Value

Development of any kind of infrastructure, setting up of office or commercial hubs, upgrades in social infrastructure like hospitals, malls, colleges, or public infrastructures like highway, airport, railway or bus stations pushes the value of properties. If an investment is located in a suburb, better connectivity and accessibility will result in profitable returns.

• Flexibility

Investments in real estate can be made according to one’s need or budget. Options like building a retirement home for long-term capital growth, buying a home in a sought-after location for continuous flow of income are solutions investors could look at. Also, one can always invest in buying an old home and refurbishing the property as per one's requirements which would greatly boost the value of the property.

• Get Attractive Finance Options

Investment in real estate is often acquired through attractive financial schemes. As interest charged on housing loans in India is much lesser than other loans, developers offer investors a host of interesting and feasible financial schemes such as 80:20, 25:75, 10:90, etc. which reduce the financial burden.

• Highly Valued Real Estate Fund

There are some managed funds which invest in multiple real estate projects across geographies. Therefore, risk can be diversified, instead of investing in a single project. However, an investor will have to evaluate and select funds as the ticket size is large and includes a larger holding period.

In Conclusion

India's real estate market has been on the rise since the last couple of years. The real estate reforms have greatly increased customer’s trust in developers and have driven sales. There has been a significant rise in the sale of inventories across major metropolises in the country. This is going to increase considerably with time, as more people are in need of housing in the country. We, at House of Hiranandani have built a robust and a diverse portfolio spread across residential, commercial, retail, townships, SEZs and offer a wide variety of options for investors looking to invest in high growth corridors of Bangalore and Chennai. 

For a quick comparison between Real Estate, Gold & Equity as an investment options, head on to our latest newsletter – Long-Standing Realty. 

A Checklist for Investing in the Real Estate Sector

The real estate sector has recently seen better performances in recent times, not only in terms of sales but also in terms of regaining customers’ trust. Just as with any other investment, investing in real estate also requires the investor to do their homework, exhaustive research and background check. This pertains to the location of the property, its surrounding, the general history of the location and its future prospects as well as the background of the company developing the property and documentation relating to the project.

Here’s a ready reckoner or checklist to follow while considering your next investment in property:

Background of Developer

It is imperative to check the track record of the developer - the number of properties developed, locations, execution, and timeliness of delivery of the project. One can also talk to other customers who have invested in the respective developer’s projects and get to know their experience.

Project Location

Location is everything in real estate. A good, thriving location ensures a steady growth in value of the property as well as rental and resale values. A number of sources provide ready data and trends about various locations vis-a-vis their price graphs, rental and resale values, and demand. Studying such data is useful in making a real estate investment decision.

Location’s Growth Prospects

Some areas are in the early stages of their growth with increasing infrastructure and commercial development, while others have seen better days. Where are you investing? Is your location of choice witnessing a phase of growth or decline? Are there plans for upcoming infrastructure or new business districts? For example, the Bangalore International Airport in Devanahalli has boosted the growth prospects of this suburb; more commercial and residential projects have been planned here making it a prospective location.

Location’s Social and Civic Amenities

Proximity of schools, hospitals, markets, business centres and multi-modal transport determine a location’s attractiveness. Check your prospective location for all these basic and necessary amenities which will ascertain how comfortable your life in this place will be. It will also determine the overall value of your investment.

Cost Benefit of Financial Schemes

Many developers enhance the attractiveness of a property by offering potential customers numerous financial schemes which aim to reduce the financial burden of purchase. Evaluate each one to understand its suitability to your individual financial needs. Some may seem more attractive but may be less suitable for you. Understand these differences so you can choose the best scheme suited to you and ensure the most value-based investment.

Read the Fine Print

All project offerings have many details encapsulated in legal language which many of us are not familiar or comfortable with. Some of these include the declaration by the promoters of the project, the stated completion time of the project and the legality of the land holding. Check the documents for these factors and ensure correctness and validity of all declarations.

RERA Registration

RERA has been a game changer in real estate ever since its implementation was enforced on developers. It has empowered customers and ensured their rights. Check the RERA registration of any project you are considering investing in and note the registration number. Projects with RERA certification are considered more attractive to customers as the developer is required to file numerous documents with the respective state RERA authority before receiving the RERA number.

Confirm Little Details

Recently there has been a spate of cases where homebuyers and investors were still waiting to receive possession from the developer. In light of such cases, an investor must be prudent about checking that the affidavit they receive from the developer carries a possession date and the rate of interest you will receive in case of a default by the developer.

The more prudent and astute one is while investing in real estate the better the results. Make the right choices, be patient, invest for long term, and watch as your real estate investment creates value and wealth for you. Read more about long-term investment avenues, their past trends, potential gains and the promising future of realty investment in our latest newsletter - Long-Standing Realty.

Hebbal - One Of Bangalore's Scenic And Well-Connected Suburb

Hebbal was once known for its pristine lake and scenic beauty situated away from Bangalore’s city limits. But now, this suburb has transformed into a residential and commercial hub in the northern quadrant of this thriving city. Hebbal has a vibrant real estate market that is supported by a network of flyovers that enable access to Outer Ring Road and NH-7.

Hebbal has witnessed massive growth and development particularly in the last 15 years because of IT hubs like Kirloskar Business Park and Embassy Manyata Business Park, which are located nearby. This suburb is also only 10.3 km away from central Bangalore (Majestic). If you are looking for a home in a suburb where there is a balance between nature and the city, Hebbal is just the place for you.

Connectivity

When we search for our dream house, we always look at suburbs which have good connectivity to reduce the time spent on the road. The Hebbal flyover is the heart of this locality, with an expansive length of 5.2 km which connects it to two main arterial roads - Outer Ring Road (ORR) and Bellary Road (NH7). The MG Road is also connected to ORR, making Koramangala only 12 km away from Hebbal. This suburb is also just 20 km away from the Kempegowda International Airport, which makes national and international travels easier.

There are many BMTC buses which run to and from Hebbal, and connect it with the rest of the city. These buses are very frequent and reliable and you can find one which goes to almost any locality you want to go. The Hebbal railway station improves the connectivity of this place even further. The proposed Namma Metro Station nearby would give Hebbal’s residents access to places like Banashankari, K.R. Market, M.G. Road, Indiranagar, and many more.

Employment Hub

The boom of IT companies in this locality has put Hebbal on a fast route for development. Hebbal is home to many giants such as Philips Software, Integra Micro Software Services, Electronics Limited, IBM and AstraZeneca. There are prominent employment hubs like Kirloskar Business Park and Embassy Manyata Business Park. This attracts IT professionals from all over the country. Yeshwantpur which is a business hub is only 10 km away from Hebbal. Other important companies located in Hebbal are Shell, BEML, Tyco, Wipro Fixtures, and National Seeds Corporation.

Well-Developed Social Infrastructure

Hebbal has easy access to many prominent schools, colleges, hospitals, shopping centers and several other amenities in close vicinity. Reputed schools in Hebbal include the VidyaNiketan School, Jain Heritage School, VidyaShilp Academy, and MallyaAditi International School. Famous engineering colleges like REVA University, Altria Institute of Technology and NITTE Meenakshi College are also located here. Presidency College, National School for Journalism and Karnataka College are other important colleges situated in this vicinity.

The famous Columbia Asia hospital, Aster CMI Hospital, Bangalore Baptist Hospital, and M.S. Ramaiah Hospital are located in Hebbal. There are numerous shopping centers located in Hebbal such as Elements Mall, Esteem Mall, Orion East Mall and Mantri Square Mall. These shopping malls along with cinemas, restaurants and branded stores cater to more than just daily essentials.

Gateway to Adventure

Hebbal Lake is one of the most desired rejuvenating spots of this suburb. This lake is well known for its park, boating facility and for the bird watching; numerous bird lovers can be seen here regularly watching out for their favourite bird species. Hebbal is close to Jakkur Aerodrome which offers adventurous folks the thrilling experience of parasailing. Soaring through the limitless horizon like a bird provides an unbelievable adrenaline rush. The Jakkurlake is also a popular destination which is located near Hebbal.

At House of Hiranandani we believe in the balance that nature provides. We are developing luxurious residences close to nature in Hebbal. Hiranandani Glen Classic is a 10 acre development which offers homebuyers urban-centric amenities balanced with the grandeur of space and comfort of privacy. Finely crafted 1, 2 and 3 BHK apartments are available which offer unmatched lakeviews. Come, experience a unique home created by House of Hiranandani in a picturesque, emerging suburb of Bangalore.

Real Estate Industry Redefined

The last two years have proven to be immensely eventful for the real estate industry of the country. So far the Government of India has enforced significant implementations like Demonetization, Benami Transaction Act, the Real Estate Regulations and Development Act (RERA), and Goods and Services Tax (GST).  These initiatives, when combined together, will magnify the growth of real estate sector in the long run.

Here are a few factors that consolidate towards redefining the real estate industry:

1. Investments of the future:
This ongoing transformation has given rise to investment inflow from both foreign and domestic institutional investors. As per syndicated reports, the Indian property market has received $3.15 billion from various investors in the first half of the current year. The expected launch of Real Estate Investment Trust (REIT) is supposed to act as a transparent process designed to generate funds from a lot of investors. REITs are predicted to act as a catalyst for increase in future real estate investments.

2. Infrastructure development :
India’s booming economy has attracted not only domestic but a manifold of foreign investors too. Since the Government of India liberalized the norms on Foreign Direct Investment (FDI), the construction sector has seen a massive growth in investments from around the world. This has doubled the funding in infrastructure development from ₹9,850 crore per annum. Also, the World Investment Report of 2016 claims an FDI investment of $ 5.7 billion in real estate.

3. Housing sector boom:
The Pradhan Mantri Awaas Yojana initiative by the Prime Minister raised its rural fund allocation from ₹15,000 crore to ₹23,000 crore, to ensure the completion of 10 million home projects by 2017-18. We are now looking at $1.3 trillion housing boom and with the timely implementation of the Goods and Services Tax (GST), there is uniformity in taxation on housing. Implementation if carried out well will ensure that various federal tax barriers are removed and a common market is created helping improve supply chain. To summarize, 60 million new houses and 2 million job opportunities are predicted by only 2018, thus boosting the nation’s overall GDP.

Given the future road map it is pertinent to say that the Indian real estate sector will only emerge stronger, healthier and is poised for sustained growth. These initiatives are stepping stones for the overall development which will redefine the real estate sector.

Cities of Focus: Hyderabad

India is a country that is booming with development from every corner. The country has a total of 4000 cities & towns. However for us, choosing the next city for our real estate project wasn’t very difficult. Rooted in a deep ethnic heritage and captivating historical significance, we zeroed down on ‘Hyderabad’.

Hyderabad during its initial stages had been sparking signs of a global city. Nobody would have imagined the unprecedented growth & development this city was capable of achieving.

●     An influx in the IT sector –Since 1990, Hyderabad had seen a number of foreign IT companies entering the city. At that point, there were over 1000 IT and ITeS companies that included major firms such as Google, Dell, Facebook and more. The city boasts of an employment growth rate of 10%. The IT industry has inculcated a high standard of living for the city which has resulted in an increase in world class real estate projects in the city.

●     Hyderabad’s Infrastructure– One of the high points of Hyderabad’s infrastructure is its metro. The metro, which is already under construction, will have three phases to create unparalleled connectivity across the city. The metro is scheduled to begin operations by November 2018.Plans to decongest the city’s roadways by projects such as the Outer Ring Road are already underway. It’s a city that foresees the future and is already planning to upgrade the existing roads, adding skywalks and more.

●     High Standard of Living– As per the Mercer Survey, Hyderabad is known to have the highest standards of living in India. The survey is based on factors such as crime rate, air pollution and improved options for international and English-speaking educational institutes.

●     Emerging Startup Hub– Asa city that encourages enthusiastic entrepreneurs, Hyderabad is witnessing a support system to encourage startups. India’s biggest incubator for startups is in Hyderabad. On the overall the city is promising because of its stable environment and cooperation between the investors, startups and the government.

These are some of the reasons as to why Hyderabad is one of the fastest growing cities in India. It offers the perfect combination of a city immersed in history, and one that embraces development and modernization.

Chennai: The Next Real Estate Investment Hub

Chennai’s advancement over the past decade as an industrial hub with the rise of various manufacturing industries has led to the development of a lively real estate market in the city. As per the Mercer Survey 2017 Quality of Living Index, which compares all major cities of India, the one city that has made improvement is Chennai. Once considered a less significant investment opportunity in India, Chennai has steadily emerged as a real estate hub to be reckoned with.

If you’ve been sceptical about investing in Chennai, here are some reasons which could make you reconsider:

Safest City in India:

Chennai has been assessed as one of the safest cities in India, jumping ahead of metros like Bangalore, Hyderabad and Pune. The Mercer Survey finds Chennai to be the safest Indian city with a global rank of 113. Chennai achieved this, based on points for internal stability, lower crime levels and efficient and capable local law enforcement. These factors would go a long way in influencing a potential real estate investor looking to enter a new territory.

Booming Business and Industry Sectors:

Sectors such as IT, the automotive industry and electronic manufacturing industry in Chennai have been constantly growing. Many companies have been investing in the city, which has given rise to employment opportunities, good connectivity and an abundance of housing options. Back in 2013, commercial offices had occupied spaces around 4 million square feet. Most of these occupants were IT/ITES companies that employed around 4.5 lakh people. Four years later, the growth has only been exponential.

Public Transport:

Chennai offers a variety of public transport systems for commuters, making it easy and fast to reach destinations. These diverse transportation systems include the Chennai Metro Rail, Chennai Mass Rapid Transit System, buses, taxis, rickshaws, etc. The government has been making efforts to improve its bus services and routes to ensure hassle free commutes. Also, in a country like India where women’s safety is a huge concern, Chennai is a city which offers safe commute to all.

An efficient and modern transport infrastructure makes any city a preferred choice for investors. With its long-term investment in developing urban transport, Chennai is now a much sought-after investment with long-term potential.

Education and Health Care:

Chennai is known to be one of the best destinations in terms of education in India. There are well reputed educational institutions such as NIFT, IIT and Loyola College. Known to be the ‘Health Capital of India’, Chennai has access to the best health care and medical facilities. Examples of such health care centres are Apollo Hospital, Fortis Malar Hospital, etc., marking Chennai for its quality of life.

As you can see from the above points, with abundant opportunities and thriving development, Chennai has a very bright future as an investment hub.

At House of Hiranandani, Chennai has been an area of focus for a while now. With a number of important developments, like our world class projects on the Old Mahabalipuram Road in Egattur, we have ticked all the boxes for location, luxury offerings and connectivity. In fact, one of our projects at the OMR - the Anchorage - is designed to be the tallest building in Chennai. As a company, we are committed in our focus to develop world-class housing projects in the city of Chennai.

Why Bengaluru Could Be The Indian City Of The Future

According to Knight Frank’s 11^th edition of The Wealth Report 2017, Bengaluru is among the top seven hotspots around the world that present exciting opportunities for private property investors in 2017 and beyond.

In another survey - Jones Lang LaSalle's fourth annual City Momentum Index of cities around the world – Bengaluru is placed right at the top of the World’s Most Dynamic Cities, beating out the likes of Shanghai, London, Dubai, New York and even Silicon Valley in the US. This index tracks the speed of change of a city's economy and commercial real estate market. It covers 134 major established and emerging business hubs and identifies cities that have the potential to maintain the greatest dynamism over the short and long term.

According to Jones Lang LaSalle, "Most dynamic cities share the ability to embrace technological change, absorb rapid population growth and strengthen global connectivity.”

The Passport Cities Database projects that Bengaluru will be one of the three Indian cities to record the fastest rate of real GDP growth over 2016-2030, making the future of the former ‘Garden City’ look very rosy indeed.

With an eye on the future, House OfHiranandani has already been steadily developing a diversified portfolio of properties in Bengaluru. In case you haven’t seen them yet, have a look at these impressive video vignettes of the well planned developments in Devanahalli, Hebbal and Bannerghatta.  Also, this video explains why we continue to push for growth in South India.

Bengaluru’s success can be attributed to three major factors:

One, known as the ‘Silicon Valley Of India’, it has attracted some of the brightest and most ambitious scientific and technological minds from around the world.

Two, government involvement seems to have worked to Bengaluru’s advantage. Here, the government has, over time, promoted investments in the city and developed a positive relationship with business and industry. There are a number of government initiatives that are bound to further enhance Bengaluru’s reputation as a city with an eye on infrastructure development: the proposed Mumbai-Bengaluru Industrial Corridor, the under-development NICE expressway that will connect the city to Karnataka and Mysore, and the expansion of the Namma Metro system.

Thirdly, Bengaluru, with its high standard of living and ease of doing business, has been steadily attracting some of India’s wealthiest individuals. According to ET Realty, “the city has 220 Ultra High Net Worth individuals, a number which has grown by 15% in the last one year.”

Many decades ago, India’s first Prime Minister Jawaharlal Nehru had predicted that the then-sleepy Garden City would be India’s ‘City Of The Future’. Now, with Bengaluru being declared ‘The Most Livable City in India’ in 2012 and with its most recent accolades, it would seem like our esteemed late Prime Minister’s prediction might be truer than we could have imagined. 

Follow Passion, Find Success

Looking back at my journey, though I had initially started my training in the medical field, destiny led me towards architecture which in turn is what I am today.

In those days (1980s), land was easily available on deferred payment wherein you could put up your signage, start selling and use that money to get approvals and then start constructing. Our first bad experience with one of the initial land proposals that came our way, is where we got to learn of the risks involved in starting anew. Nevertheless we took that risk and started our first project in Versova at a rate of Rs.241 per sq ft.

Since we were always short of capital, we believed in purchasing something that could be available on the above terms and then launch it.  Later we bought this land in Powai where there were multiple land owners which added to the risks though but we still went for it, Powai being a big challenge.  Slowly we assembled this into a large land parcel and started selling it at Rs 450 per sq ft in 1986. In the initial years, we suffered losses in Powai, but the continuous thought in mind that we would definitely profit in the next phase made us accomplish a lot of land in the interim. Post this we started aggregating land in Thane.

I have always done only architecture and construction. Legal, accounting and liaising have been necessary evils. We are better known for our engineering function rather than finance circles as we have never raised money. People who have worked for us always get promoted faster when they go elsewhere. We had huge training programs set up by Anthony Remedios, a Goan [architect] who was passionate about design and architecture.  

For me, at the end of the day, I want my business to be about creativity of design rather than creativity of financing.

Following my passion, I can feel the rewards.