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Shivam Tomer

Shivam Tomer
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https://www.ipropunited.com/
Talks about : Real Estate News, Investment Tips, Proptech, Loan tips and Property Tips
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What is Return on Investment (ROI) and how to calculate it?

By
Shivam Tomer
-
Rate-of-Return
Rate-of-Return
Understanding Return on Investment (ROI)

Return on investment (ROI) is a measure used to estimate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI approaches directly measure the amount of return on a particular investment relative to the investment’s cost. 

The benefit (or return) of an investment is divided by the cost of the investment to calculate ROI. The result is expressed as a percentage or a ratio. 

To calculate ROI, divide the difference between the current value of the investment and the cost of the investment by the cost of the investment. 

“Current value of investment” refers to the profits obtained from the sale of the investment of interest. ROI is easily comparable to other investment returns because it is measured as a percentage, allowing a variety of investment types to be compared. 

ROI is popularly used because of its versatility and simplicity. Essentially, it is used as a rudimentary gauge of an investment’s profitability. This could be the ROI a company expects on expanding a factory, ​the ROI on a stock investment, or the ROI generated in a real estate transaction.

The calculation itself is not overly complicated, and it is relatively simple to interpret given its wide range of applications. If the ROI on investment is net positive, it is probably worthwhile. However, if other opportunities with higher ROIs are available, these signals can assist investors in eliminating or selecting the best options. Besides, investors should avoid negative ROIs, which imply a net loss.

For instance, suppose A invested Rs 1,000 in Slice Pizza Corp. in 2017 and sold the shares one year later for a total of Rs 1200. Now, divide the net profits (Rs 1200 minus Rs 1000) by the investment cost (Rs 1,000) to calculate an ROI of 20%. 

Now, this information will give you an idea to compare the investment in Slice Pizza with any other projects. Suppose A also invested Rs 2000 in Big Sale Stores Inc. in 2015 and sold the share for a total of Rs 2,800 in 2018. The ROI on A’s holdings in the big sale would be 40%. 

Limitations of ROI

The above example reveals the limitations of using ROI, particularly when comparing investments. While A’s ROI was double that of the first investment, the time between purchase and sale in the first and second investments was one year and three years, respectively. 

A could adjust the ROI of the multi-year investment accordingly. One could divide the entire 40% by three to obtain the average annual ROI, which is 13.33% annualized. These adjustments show that the second investment earned more profit, while the first investment was actually a wise decision. 

ROI can be used in conjunction with the rate of return (RoR), which takes into account a project’s time frame. You can also use net present value (NPV), which accounts for differences in the value of money over time due to inflation. The application of NPV when calculating the RoR is often called the real rate of return.

ROI developments

SROI was created in the late 1990s to account for the broader impacts of projects using extra-financial value (i.e., social and environmental metrics not currently reflected in conventional financial accounts). Lately, investors and businesses have shown their interest in the development of new forms of ROI, called SROI, or “social return on investment.”

SROI helps to understand the value proposition of certain environmental, social, and governance (ESG) criteria used in socially responsible investing (SRI) practices.

For example, a company may want to recycle water in its factories and replace all of its lightings with LED bulbs. These tasks have an immediate cost that may have a negative impact on the traditional ROI. However, the net benefit to society and the environment could lead to a positive SROI. 

There are some other new variations of ROIs that have been developed for specific purposes. The efficiency of social media campaigns is determined by the social media ROI, which shows the number of clicks or likes achieved per unit of effort. Similarly, the return attributable to advertising or marketing campaigns is determined by the marketing statistic ROI. 

Understanding ROI in simple terms

ROI (return on investment) tells you how much money you’ve made (or lost) on an investment or project after accounting for its cost.

How to Calculate Return on Investment (ROI)?

Return on Investment (ROI) is obtained by dividing the gained profit on an investment by the cost of that investment. For instance, an investment with a profit of Rs 100 and a cost of Rs 100 would have an ROI of 1 or 100% when expressed as a percentage. However, ROI is a quick and easy way to estimate the success of an investment, but it has some significant limitations. For instance, ROI is unable to reflect the time value of money, and it can be hard to meaningfully compare ROIs as some investments will take longer to generate a profit than others. Due to this reason, other metrics are being used by professional investors, such as net present value (NPV) or the internal rate of return (IRR). 

What Is a Good Return on Investment?

The “good” ROI depends on a number of variables, including the investor’s risk tolerance and the length of time it takes for an investment to start paying off. If everything is equal, investors who are more risk-averse will probably accept lower ROIs in exchange for taking less risk. Moreover, investments that take longer to pay off will generally require a higher ROI in order to be attractive to investors. 

What Industries Have the Highest ROI?

Altogether the average ROI for the index S&P 500 has been about 10% per year. However, depending on the industry, there can be significant variation within that. For instance, many technology companies produce annual returns above this 10% threshold. Meanwhile, companies in other industries, such as energy companies and utilities, made much lower ROIs and in several cases faced losses year over year. Gradually, it is normal for the average ROI of an industry to shift due to factors such as increased competition, technological changes, and shifts in consumer preferences.

5 reasons why Mumbai’s real estate market is glittering this festive season

By
Shivam Tomer
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In the second quarter of the fiscal year 2023-24, the Mumbai real estate market witnessed a supply of 9,489 residential units. Notably, the first ten months of 2023 saw a total of 1.04 lakh property registrations. October, marking the commencement of the festive season with Navratri, recorded a remarkable 20 percent increase in property registrations compared to October 2022.

In Q2FY23-24, the Mumbai real estate market reported a supply of 9,489 residential units.

Several factors have contributed to the vibrant real estate market during this festive season

Here are five reasons why the real estate market is sparkling this festive season.

  1. Upgrades to Larger Apartments: Post the Covid-19 pandemic, there has been a nationwide trend of homebuyers upgrading to more spacious apartments. In Mumbai, the launch ratio of 1 BHK units decreased to 29 percent in 2023 from 34 percent in 2019. Meanwhile, 2 BHK units maintained a consistent ratio of 38 percent, and 3 BHK apartments saw an increase to 15 percent in 2023 from 11 percent in 2019. This shift indicates that residents of 1 BHKs are upgrading to 2 BHKs, and 2 BHK owners are moving to 3 BHKs, as per registration data from the Maharashtra Real Estate Regulatory Authority (MahaRERA).

  2. Redevelopment Initiatives: Post the Covid-19 period, there was a surge in redevelopment projects in Mumbai. The Maharashtra government’s approval of a 50 percent discount on premiums paid by real estate developers for various permissions incentivized redevelopment efforts. Approximately 20 percent of the total monthly property registrations involve Permanent Alternate Accommodation Agreements (PAAAs) related to redevelopment projects in Mumbai.

  3. Stable Home Loan Interest Rates: The Mumbai real estate market observed a stability in home loan interest rates throughout FY2023. This stability has instilled optimism among homebuyers, particularly in the affordable segment, where the majority of residential deals are priced at Rs 2.50 crore and below. The assurance of stable interest rates has further strengthened the housing market sentiment.

  4. Rise in High-Value Transactions: There has been a notable increase in the registration of properties valued at Rs 1 crore or more. This segment accounted for approximately 56 percent of registrations between January and October 2023, up from 50 percent during the same period in 2020. High-value transactions, exemplified by developments like the Hiranandani Group’s sales of luxury apartments in Powai, have contributed significantly to this trend.

  5. Festive Season Surge: The festive season, starting with Navratri in October, witnessed a surge in property registrations. Mumbai reported 4,594 units registered during the nine days of Navratri in 2023, marking a 37.4 percent YoY growth from the previous year. This festive season rush further bolstered the real estate market, reflecting the buoyant spirit among homebuyers.

Haryana Becomes First State in India to Implement Property ID: Minister

By
Shivam Tomer
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Property Documents
Property Documents

Urban Local Bodies Minister, Dr. Kamal Gupta, announced that Haryana has become the first state in the country to implement Property ID. Prime Minister Narendra Modi praised Chief Minister Manohar Lal Khattar for introducing the ‘Creation of New Property-ID under Normal and Tatkaal Scheme’ and encouraged other states to adopt it.

Addressing journalists in Chandigarh, Dr. Gupta revealed that 34 lakh properties within Lal Dora have been integrated into the new Property ID system. This integration allows automatic data entry from property registries into the Property ID database. Out of 2,274 unauthorized colonies, 494 have already been regularized, and efforts are underway to regularize the remaining colonies. Dr. Gupta stated that around 850 colonies are set to be regularized by January 31, 2024.

He also highlighted the ‘Svamitva Yojana,’ which grants ownership rights to shopkeepers who have operated in their establishments for 20 years or more by December 31, 2020. Additionally, property-related information can now be sent to citizens via SMS through urban local bodies.

Dr. Gupta further mentioned a limited-time tax relief for full property tax payments in the fiscal year 2023-24, with the relief period extending until November 15, 2023. Property owners are encouraged to verify their property data on the departmental portal to rectify any errors.

The announcement was attended by senior officials, including Director of the Urban Local Bodies Department, Yash Pal, and Additional Director, Y. S. Gupta.

Housing Market 2023: When Will Home Prices Be Affordable Again?

By
Shivam Tomer
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As the anticipation of winter looms in the distance, the housing market, already showing signs of cooling due to staggering home prices and escalating interest rates, appears to be on the brink of a significant slowdown.

The national average 30-year mortgage rate climbed for the seventh consecutive week, hitting a daunting 7.79% by the week ending October 26, as reported by Freddie Mac. Unsurprisingly, given these current rate conditions, year-over-year existing home sales faced a decline for the third consecutive month, dropping by 0.7%. This decline was consistent across all four major U.S. regions, according to the National Association of Realtors (NAR).

Nevertheless, the housing market continues to present a competitive landscape for potential buyers. The dilemma persists as many homeowners are “locked in” at historically low interest rates and are hesitant to sell, resulting in demand consistently outpacing available inventory.

Housing Market Forecast for October 2023

The housing market’s outlook for October 2023 remains bleak, overshadowed by the challenges of soaring mortgage rates, escalating home prices, and a limited supply of available homes. This trifecta of issues continues to fuel the ongoing housing affordability crisis, making it increasingly difficult for prospective buyers to enter the market.

To compound the situation, the Federal Reserve is contemplating yet another increase in the federal funds rate by the end of this year to combat inflation. The federal funds rate, which stood near 0% in March 2022, has seen 11 consecutive hikes, bringing it to the current range of 5.25% to 5.5%, marking the highest levels seen in 22 years.

Fed projections indicate that the terminal federal funds rate could reach 5.6% by the close of 2023, implying the possibility of at least one more 25 basis-point rate increase this year. Although changes to the federal funds rate indirectly impact mortgage rates, experts are now more concerned about the Fed’s long-term plans for interest rates rather than a minor increase this year.

Keith Gumbinger, vice president at mortgage website HSH.com, emphasizes the significance of the Fed’s intentions and how long policymakers plan to maintain elevated rates, as well as when they might initiate rate cuts. During their September meeting, Fed policymakers hinted at the likelihood of interest rates staying “higher for longer,” with policy rates potentially remaining half a point higher until the end of 2024 and 2025, according to their latest projections.

Given these indications, many experts in the housing market anticipate that mortgage rates will continue to remain elevated not only for the remainder of this year but potentially extending into 2024, further adding to the challenges faced by homebuyers.

When Will the Housing Market Recover?

The path to housing market recovery, according to experts like Gumbinger, hinges on specific conditions. One crucial factor is a substantial increase in home inventories available for sale. This surge in supply would alleviate the upward pressure on home prices, potentially leveling them off or even causing a slight decrease from their peak levels.

Additionally, a necessary shift involves moderation in interest rates. However, Gumbinger emphasizes the importance of a gradual decline in rates, cautioning against rapid falls. A sudden plunge in rates could trigger a surge in demand, negating any progress made in inventory gains and causing home prices to rise once again.

According to Gumbinger, it’s preferable for rate reductions to occur steadily, improving buyer opportunities incrementally over time, rather than all at once. Returning mortgage rates to a more “normal” range, specifically in the upper 4% to lower 5% bracket, could contribute to the housing market’s recovery, eventually bringing it back to the levels observed between 2014 and 2019. However, Gumbinger anticipates that it might take a considerable amount of time before reaching these favorable rate conditions.

Where Do Mortgage Originations Currently Stand?

The current mortgage landscape presents a challenging scenario for potential homebuyers. With the average 30-year fixed mortgage rate hovering above 7%, the prospect of a 5% mortgage rate seems distant. Despite these high rates, mortgage originations saw an uptick in the second quarter of 2023, totaling $463 billion, compared to $333 billion in the preceding quarter, according to data from the Mortgage Bankers Association (MBA).

However, the MBA anticipates a decline in originations, expecting subdued activity throughout the remainder of 2023 and into early 2024. The current mortgage spread, representing the difference between the 10-year Treasury bond yield and the 30-year fixed-rate mortgage, stands at around 300 basis points. Historically, this spread should be between 150 and 200 basis points. A return to a more normalized spread could encourage hesitant homebuyers to re-enter the market.

The timeline for this spread to narrow remains uncertain. Odeta Kushi, deputy chief economist for First American, suggests that the spread might decrease as the Federal Reserve completes its monetary tightening, possibly in the coming months. If this occurs, mortgage rates could decrease, even if the benchmark 10-Year Treasury rate remains unchanged.

Housing Inventory Outlook for October 2023

he housing inventory situation in October 2023 continues to present significant challenges, especially in the realm of entry-level housing. The supply of homes remains at historically low levels, exacerbating demand and sustaining the excessively high prices of homes.

Adding to the problem, new home construction, which had been helping alleviate some of the shortages, has declined in recent weeks. According to Jack Macdowell, chief investment officer, and co-founder at Palisades Group, the inventory shortage is strikingly pronounced, with current levels approximately 46% below the historical average dating back to 1999. Unfortunately, there is a strong consensus that this inventory problem is unlikely to be resolved in 2023.

Existing Homes

In August, the inventory of existing homes showed a slight improvement, but the positive momentum was short-lived. According to the National Association of Realtors (NAR), existing-home stock declined by 0.9% in August. The available unsold inventory remained unchanged month-over-month, maintaining a meager 3.3-month supply at the current sales pace. Housing experts typically consider a balanced market to have four to six months’ worth of inventory.

Existing-home sales also continued to struggle, dropping by 0.7% in August and a staggering 15.3% compared to the previous year. Apart from a minor increase in April, year-over-year home sales have consistently declined since February. The outlook for the near future appears bleak, as pending home sales, a key indicator, plummeted by 7.1% in August, marking an 18.7% decline from the previous year.

Lawrence Yun, the chief economist at NAR, emphasized the need for increased housing inventory and improved interest rates to breathe life back into the housing market.

New Homes

In August, the inventory of new homes continued its decline, with a seasonally adjusted estimate indicating only 436,000 houses available for sale at the month’s end. This translates to a 7.8-month supply at the existing sales pace, down from 8.7 months recorded a year earlier, as per the latest data from the U.S. Census Bureau and U.S. Department of Housing and Urban Development (HUD).

During the same period, new home sales experienced a sharp decline, dropping by 8.7% to a seasonally adjusted annual rate of 675,000. The fall in sales cannot be solely attributed to high mortgage rates and soaring home prices, according to experts. Rather, the primary cause appears to be the insufficient supply of new homes in the market.

Robert Frick, a corporate economist with Navy Federal Credit Union, pointed out that while elevated mortgage rates and home prices contribute to the challenge, the substantial dip in new home sales during August can be largely attributed to the scarcity of available properties. Builders are finding it difficult to meet the growing demand due to various constraints, exacerbating the situation.

Will the Housing Market Crash in 2023?

Amidst the upward march of mortgage rates, home prices have surged, reaching record highs in July 2023, marking the sixth consecutive month of gains. According to the latest S&P CoreLogic Case-Shiller Home Price Index, national home prices rose at an annual rate of 1%, with a 0.6% increase observed between June and July after seasonal adjustment.

Craig J. Lazzara, managing director at S&P DJI, noted the robust rally in U.S. home prices, with the National Composite rising by 5.3% on a year-to-date basis, surpassing the median full calendar year increase recorded in over 35 years of data. Despite these gains, there were stark regional disparities. Leading the pack were Chicago (+4.4%), Cleveland (+4.0%), and New York (+3.8%) in July, while pandemic boomtowns like Las Vegas (-7.2%) and Phoenix (-6.6%) witnessed plunging home values. The West (-5.9%) and Southwest (-3.6%) regions also experienced notable declines.

Despite these fluctuations, the likelihood of a housing market crash—characterized by a rapid drop in unsustainably high home prices due to waning demand—remains low. Experts point out that current homeowners are in a more secure position compared to those post-2008 financial crisis, with many borrowers having positive equity in their homes. However, Dan Hnatkovskyy, co-founder, and CEO of New Homes Mate, a marketplace for new construction homes, sees a potential price collapse on the horizon, particularly in markets where real estate investors have acquired numerous properties. emphasized that if external factors push the market over the edge, the consequences could be severe.

When Should I Buy a Home in 2023?

Deciding when to buy a home is a deeply personal choice, regardless of the market conditions. Given that homes represent one of the most significant lifetime investments, being financially stable is essential before making such a decision.

Orphe Divounguy, senior macroeconomist at Zillow Home Loans, emphasizes that attempting to predict the ideal time to buy in the ever-changing housing market is nearly impossible. Instead, he suggests that prospective buyers should focus on finding a home that suits their current and future family needs and falls within their budget.

Keith Gumbinger, vice president at mortgage website HSH.com, agrees, stating that waiting for better market conditions can be futile. Home prices tend to rise over time, making it challenging to amass a down payment if one keeps postponing the decision. Divounguy adds that taking the step onto the property ladder is a valuable endeavor, allowing individuals to start building equity and net worth. Ultimately, the right time to buy is when the home aligns with your needs and financial capabilities.

Pro Tips for Buying in Today’s Housing Market

  • Explore Lower-Priced Markets: If your job allows remote work or offers flexibility, consider moving to a more affordable housing market.

  • Prepare in Advance: Organize your finances, gather necessary documents, consult multiple lenders, and work on improving your credit score. Being prepared enables quick decision-making.

  • Stay Informed: Regularly monitor property prices and listings to stay ahead of the competition. Being proactive can give you an advantage in a competitive market.

  • Understand Your Budget: Calculate your monthly payments, including taxes, and ensure they align with your budget. Understanding the financial implications is crucial.

Expert Tips for Sellers in Today’s Housing Market:

  • Consult a Real Estate Agent: Collaborate with a real estate agent to set the right price, foster buyer competition, and increase the chances of a faster sale.

  • Enhance Your Home’s Appeal: Prepare your home for sale promptly. Invest in necessary repairs and improvements to make it more attractive to potential buyers.

  • Leverage Online Presence: Boost your home’s online curb appeal. High-quality photos and detailed descriptions can significantly enhance your property’s online visibility and attractiveness.

  • Use Interactive Tools: Include interactive elements like 3D home virtual tours or interactive floor plans in your listings. These features can increase page views and save your listing for potential buyers.

 
 
 

Tezu Airport in Arunachal Pradesh: A Catalyst for Regional Development and its impact on Real Estate

    By
    Shivam Tomer
    -

    Nestled in the scenic Lohit district of Arunachal Pradesh, Tezu Airport spans a sprawling 212 acres and serves as a pivotal domestic airport. Its inauguration in 2018, driven by the government’s visionary Regional Connectivity Scheme (RCS) as part of the UDAN initiative, marked a significant leap in regional accessibility. This scheme, aptly named Ude Desh ka Aam Naagrik, aimed at democratizing air travel and fostering regional connectivity. Tezu Airport, since its inception, has facilitated over 2.50 lakh UDAN flights, enabling more than 1.37 crore people to embark on their journeys affordably.

    A Gateway to Northeast India

    More than just a transportation hub, Tezu Airport stands as a testament to the government’s commitment to regional development. It bridges the gap between the serene landscapes of Arunachal Pradesh and the rest of the nation. This airport is not merely an arrival and departure point; it’s a gateway inviting travelers to explore the natural beauty and cultural richness of the Northeast.

    Impacts on Real Estate and Development

    The establishment of Tezu Airport heralds positive transformations in the real estate sector and overall regional development, promising a host of benefits:

    • Enhanced Connectivity: Tezu Airport significantly improves connectivity, not only easing travel for passengers but also driving economic growth in the region.
    • Economic Prosperity: Better connectivity fosters increased trade and economic activities. The airport is poised to stimulate economic growth, generating employment opportunities and bolstering the local economy.
    • Infrastructure Growth: Anticipated growth in trade and employment is set to trigger a wave of infrastructure development. This includes the expansion of road networks, utilities, and public services, enhancing the overall living experience in the vicinity.
    • Real Estate Surge: The positive economic environment and rising demand for housing and commercial spaces are expected to fuel an upward movement in real estate prices. Areas around Lohit, particularly around the airport and the township of Tezu, are projected to witness a surge in real estate values in the years to come.

    In essence, Tezu Airport serves as a catalyst, not just simplifying travel but also sparking a ripple effect in regional development. As connectivity expands, trade flourishes, and opportunities multiply, the real estate landscape in this promising region is poised to flourish, ushering in a new era of growth and prosperity.

     

    Don’t ban non-polluting infrastructure work, say NCR builders

    By
    Shivam Tomer
    -

    As per the revised graded response action plan (GRAP) for the NCR, if the air quality turns “severe” (stage III), authorities will have to enforce a ban on construction and demolition activities in the region

    Non-Polluting Infrastructure
    Non-Polluting Infrastructure

    NCR Builders Call for Exemption from Construction Bans

    Amid deteriorating air quality in the National Capital Region (NCR), real estate developers are urging the government not to impose a complete ban on construction activities during severe pollution episodes. The revised Graded Response Action Plan (GRAP) for the NCR mandates a ban on construction and demolition when the air quality reaches “severe” (stage III) levels. Developers argue that not all construction activities contribute to pollution and are requesting the government to identify non-polluting tasks that can continue.

    Identifying Non-Polluting Construction Work

    Harsh V Bansal, convenor of the CII Delhi Sub-committee on Real Estate, Urban Development, and Infrastructure, emphasized that not all construction site activities result in pollution. He suggested that the government identify these non-polluting tasks, allowing work to proceed and ensuring timely project completion. Developers stress that this targeted approach would enable them to maintain project schedules while adhering to pollution control measures.

    Impact on Project Timelines and Laborers

    Last year, the Real Estate Regulatory Authority of Delhi and the Confederation of Real Estate Developers’ Associations of India (CREDAI)-NCR voiced concerns about the impact of construction bans on project deliveries. According to Manoj Gaur, chairman of CREDAI national and CMD of Gaurs Group, a three-day ban results in a delay of over a month. The situation becomes more challenging when laborers, who travel from different states to work in Delhi NCR, face unemployment due to frequent construction halts, causing delays in apartment deliveries to homebuyers.

    Challenges Faced by Daily Wage Workers

    The repercussions of construction bans are felt acutely by daily wage workers. Kezya De Bragança, founder & CEO of Bettamint, a construction tech startup, highlighted the cascading impact on these workers’ income. Construction project closures disrupt their earnings, pushing them into a precarious struggle to maintain basic living standards. This emphasizes the urgent need for a balanced approach that considers both environmental concerns and the welfare of laborers.

    Supporting the Workforce During Bans

    Acknowledging the challenges faced by laborers, leading construction companies in India are providing essential support. They offer housing, food, and financial security to ensure the well-being of their workforce during construction bans. This comprehensive approach aims to mitigate the adverse effects on both project timelines and the livelihoods of the workers involved in the construction industry.

     
     

    Tips for buying commercial land in India

    By
    Shivam Tomer
    -
    Commercial Property
    Commercial Property

    The demand for commercial real estate is rapidly increasing corresponding to the amassed population of our country. Investment in commercial property has a scope for higher returns as compared to residential investment. Albeit for a new investor it may be challenging to zero down on the type of property to invest in but there are many ways to counter that. We have put together a few important tips that an investor can follow while planning to invest in commercial spaces.

    Proper Market research

    It is important to study and understand the trends of the market well in order to gain profit. Before investing in commercial property you should always analyze the scope of future development in the area. Buying a property in a developing area is more beneficial because it provides you with high returns on your investment.

    Selecting a good & developed location

    Location is an important factor to be considered while investing in a commercial property. The location should be well developed and accessible from the other location. Property in the prime location will always double your investment.

    Investing options

    Commercial real estate includes industrial complexes, retail shops, large apartment buildings, office buildings and many more. It is important to determine which type of property you want to deal with.

    Connect with an expert

    Buying a commercial property can be confusing and difficult when you do not have any prior experience. In that situation, you should take advice from experts like lawyers, accountants, and property consultants. They can help you make the right decision and to get through the complex procedures of legal aspects finance and so on.

    Layout plan of the project

    The layout of any property has a major impact on operational efficiency. Make sure the property you are buying has received all the approvals from the authorities so that you do not end up making any wrong decisions.

    Conclusion

    Commercial real estate investment can be difficult if you do not have good knowledge regarding the properties. However, with the above-mentioned tips, you can buy a property that assures a good return on your investment. With a proper plan, it is not difficult to find ways to mitigate the risks.

    Renting a Furnished vs Unfurnished Property

      By
      Shivam Tomer
      -

      Today, with endless choices available in the real estate market from an unfurnished unit to a fully furnish serviced apartment it is difficult to make a choice between the two. With the exponential growth in the market of real estate, fully furnished homes have become a norm in the last few years. Builders have been redefining luxury with homes replete with furniture, modular kitchens, upholstery, bathroom fittings etc. due to which these apartments are always in demand. Even landlords have started letting out furnished units due to its increased demand.

      Furnished property

      From the dining table, sofa sets to a modular kitchen, the furnished home has everything which is required for perfect living. Though it is an attractive bargain, one must keep both advantages as well as disadvantages in the mind while making the investment decision.

      Advantage of a Furnished Apartment

      • No extra shopping is required: One of the biggest advantages of moving into a furnished home is that it spares you the endless shopping trips you would have made in order to buy furniture and other durables. Furnished homes are equipped with all modern amenities for a comfort living. This also even save the cost of hiring an interior designer.
      • Shifting to a furnished property is stress-free as it does not require you to pack and unpack the entire furniture. It saves cost as well as the effort.
      • Another big advantage of picking up a furnished property is that one gets everything of daily use right there from day one of moving into the house. It is especially useful for those who are left with limited time after their work.

      Disadvantages of Furnished Apartments

      • Expensive: A well-furnished apartment is more expensive as it already has everything you need. From wooden floorings to modular kitchens a furnished apartment is equipped with all the amenities you look for in a house, but these amenities come at a price.
      • Not many options available: In the case of furnished properties, your options are limited in terms of design, furniture, locations etc. You might have to compromise upon the choice of area or sometimes except the items placed inside and definitely one ends up paying a higher amount as compared to the unfurnished accommodation.
      • Limited freedom to decorate your home: A furnished apartment will restrict you from customizing your home because the furniture pieces and other accessories are already in the right place.

      Unfurnished Property

      unfurnished house

      An unfurnished house may not be equipped with furnishings, electrical gadgets, couches or beds but you get the freedom to customize and decorate your home according to your style.

      Let us have a look into the advantages and drawbacks of an unfurnished property.

      Advantages of Unfurnished Apartments

      • Freedom to customize your home: With the unfurnished apartment you get the liberty to decorate your entire home exactly the way you want it. You can make necessary modifications as per your family requirements, buy your favourite dining set, maybe the top end microwave for your kitchen, paint the walls with the colour of your choice and you have the opportunity to customize your room in your own style.
      • Affordable/Less expensive: The price of an unfurnished property is always lower than a furnished property. Similarly the rentals will be lower in case of an unfurnished house. It is much more economical and gives you option to put up things and furniture of your choice in your home.

      Disadvantages of Unfurnished Apartments

      • Moving in might be costly: Shifting to an unfurnished apartment requires you to invest your money in buying household essentials and other accessories for the new house. This might cost you a lot. Moreover, you also need to spend money on hiring the shifting agencies.
      • Shifting is time-consuming: Moving furniture from one place to another requires a lot of planning and you need to be extra cautious especially with the breakables. Be it expensive furniture, a china dish or a gifted antique you want every item to be fully packed so that they remain unharmed. This requires a lot of time for packing and unpacking which makes shifting a difficult task.

      Best Cities To Live In India

      By
      Shivam Tomer
      -
      Best cities to live in India
      Best cities to live in India

       

      India is a country with diverse and ancient beauty, food, culture, world heritage cities and so much more. The life here may be colorful and joyful but stressful and difficult at the same time but never boring. It is rightly called the country of millennials and millennials today believe in living life to its fullest without compromising and they believe in enjoying each phase of their life. Whether it is education, business or retirement each phase is believe to bring its own experiences and where you live or work or have your business also leaves you with its own teachings and learnings.

      India is a big country geographically and offers so many diverse options when it comes to buying a home for the family or an opportunity to spread your business. So, if one wants to draw a conclusion as to which cities in India are most suitable to live and work it requires a deep amount of research as many factors are to be negotiated before pronouncing the best opportunity one is seeking for establishing one’s life in a new city in India.

      Ahmedabad

      Situated on the banks of the Sabarmati River in Gujarat, Ahmedabad is one of the best cities to live in India. Ahmedabad was founded by King Ahmedshah Badshah, and the impact of that era may be seen in many monuments of diverse styles in and around the city. SG Highway, Satellite and Prahlad Nagar feature lavish apartments and residential facilities, making them suitable for families and young students. The cost of living starts at 3000 INR depending on where the person wish to spread his roots.

      Bengaluru

      Bengaluru is one of the cities with the Best IT Companies that transformed the corporate landscape in India. It has gone from being the Garden City of India to becoming the silicon hub of the country. The city that brings the world together also has some of the most food joints and eclectic music in the country.

      Delhi NCR

      Delhi is the capital and the heartland of India including NCR (National Capital Region). From the corridors of power in Parliament House to the very crowded markets, Delhi is the city where the action happens. Gurugram, the neighboring city of Delhi has brought a renewed sense of purpose and opportunity to the city, once again putting something “New” in New Delhi. There is no dearth of opportunities in the city and is almost most sought after home for people living in smaller towns which have limited growth potential and opportunities. The largest real estate companies are busy constructing condos with latest amenities and features for an ever-increasing need for more houses since there is a constant influx of people from neighboring states. It has something in store for everyone’s need.

      Hyderabad

      Hyderabad, also known as a whole school of biryani, has stood apart from the days of the Nizams. In today’s time, the timeless city is a study in contrasts where lively markets stand toe to toe with malls and the cutting-edge technology in HiTech city wander along the shaded bustling lanes of the city. After Bangalore, Hyderabad is emerged as the hub for IT/software companies. Filled with multiple opportunity, Hyderabad is one of the best cities to live in India.

      Kolkata

      Kolkata is one of the cheapest and most affordable cities in India. If you planning to relocate then one must consider and give priority to Kolkata because it allows you to live a simple lifestyle. The city boasts stunning buildings, sumptuous food, beautiful people and distinct culture. In Kolkata, everything is at a reasonable price, from transportation to lodging to clothing to food. In addition, the city is well known for its tradition and culture, which extends to cinemas.

      Mumbai

      Mumbai is a city with many nicknames like Land of Bollywood, The Dream City, Financial Capital of India and many more. This city is known as both the entertainment and commerce hub of India, which boasts the greatest concentration of wealthy individuals in India. With the most significant GDP, the city provides essential services for residents such as transportation, clean water, educational institutes, infrastructure, healthcare facilities and commercial prospects. From beautiful parks, a tranquil marine drive, street shopping to convenient transportation and the finest nightlife in India. We can say that Mumbai is the best example of an ideal destination to live and work in India.

      Pune

      Pune city is a right mix of cosmopolitanism and peaceful life. As the birthplace of the Maratha Empire Pune is brim with a historical legacy. Pune also has 500 companies, which include multiple IT Companies and successful start-ups; they rub their shoulders while making their mark on the global economy.

      Surat

      Surat is a peaceful city located in the state of Gujarat and it is famous for its diamond and textile industries. Surat is a city with the lowest crime rates in India which makes it one of the best cities to live in India. The growth of city is expanding rapidly and is also considered as one of the cleanest cities. Surat is also famous for its delectable religious sites, cuisine and beaches. This city also has the largest Saree textile industry in India. People love their handicrafts, which reflect their personality and taste.

      Above Cities places Alphabetically.

       

      Some Basic Guidelines To Reverse Mortgage

      By
      Shivam Tomer
      -

      Reverse mortgage is a way to receive a regular income against mortgaging a residential property. It is just the reverse of home loan where a certain amount of loan is repaid in installments. In this case, a person receives a stream of income regularly against the mortgaged property.
      Introduced in 2007 by the Union Government of India, this scheme was launched to facilitate mainly the senior citizens against their medical bills and increased cost of living.
      Highlight of this scheme is that the borrower and his/her spouse can use the residential property for the purpose of living until their death through reverse mortgage.

      All-about-reverse-mortgage-loans
      All-about-reverse-mortgage-loans

      Conditions for Reverse Mortgage:

      • The age of the applicant must exceed 60 years and the co-applicant i.e. the spouse must be above 58 years of age.
      • A senior citizen must own a property which is required to pledge for a monetary value.
      • It must be located in India and should be self-occupied.
      • No encumbrances shall be attached to the property and should have a minimum life of about 20 years.
      • The maximum amount of mortgage amount cannot exceed 60% of the value of the property.
      • General tenure of mortgage ranges from minimum 10 years to maximum 15 years. However, few banks offering tenure of 20 years as well.

      Procedure for Reverse Mortgage:

      • After complying the conditions, the applicant can apply for the reverce mortgage with required documents.
      • The lender/bank will evaluate the value of property taking into account various factors including condition of the property, its demand in the market and the value of other properties at par with it.
      • Periodic payment of loan decided after taking into consideration price fluctuations and margin of interest cost.
      • The mortgaged property gets reevaluated once every 5 years and borrowers may ask to increase the amount of loan, in case the value of the property inflates. Alternatively, lump sum amount can also be procured from the lender.
      • The interest paid on reverse mortgage could be floating or fixed depending upon the market norms.
      • Loan can be availed in monthly, quarterly or yearly installments. It can also be procured in lump sum by the borrower.
      Taxation Guideline:
      The amount received under reverse mortgage is treated as loan not an income. Hence it is not liable for taxation. However, in the course of repayment of mortgage loan; any capital gain arising attracts a capital gain tax.

      Settlement of Reverse Mortgage:

      • The liability to repay the mortgage loan arises with the death of last surviving spouse.
      • Either the heirs of the property may arrange to settle the loan amount along with accumulated interest to receive the ownership of such property; otherwise the bank arranges to sell off the property to recover the loan amount.
      • If the bank receives an amount greater than the loan amount together with accumulated interest, the difference is passed on to the legal heirs of the property. But in case the sale proceeds of the property are less than the loan amount, the difference cannot be recovered from the legal heirs of the property.

      Foreclosure of loan could be possible, if borrower:

      • Not staying continuously for a year in the property against which mortgage loan is acquired.
        • Renting a part of property.
        • Adding a name into ownership of the property.
        • Fail to insure the house or fail to pay the property tax.
        • Abandons or donates the property.
        • Declared as bankrupt.
        Other highlights of Mortgage loan:
        • If the borrower or his/her spouse outlive the period of tenure, the bank cannot get the property vacated to recover the loan. Bank will either wait till the borrowers die to settle the loan amount.
        • But after the completion of tenure, the bank stops the monthly installment payments to borrower.

      It is however a difficult, complicated and tedious process. Even there is no provision of increasing monthly payouts. This modern option to finance your retirement via mortgaging a residential property has not gained much popularity in India due to lack of marketing strategies.

      But, it is surely a viable solution for senior citizens in terms of financial sufficiency. A professional assistance is always recommended to plan out a sound retirement.

       

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