Investment Advisory

Right Investment Strategy For Luxury Property 

Luxury property is a dream home that one wants to cherish forever. As such one must be extra vigilant and selective when it comes to availing  golden opportunity to purchase a luxury home. The rich investor class considers a variety of factors when investing, including location, connectivity, proximity to business centre, return on investment (ROI) potential, and regional development. Here is a rundown of four key factors to consider before investing in a luxury property, particularly if you want to add luxury property to your investment portfolio.

Location is the Key

Let’s put it straight. Luxury property investment requires a huge sum and the HNIs do not lack this. However, while making a selection of that suave and high-end property, the rich class looks for a prime location and classy ambience. A filthy and underdeveloped locality will be a strict No-No for the investors. The luxury property must be situated at a prime location with developed physical infrastructure, power facilities and a business ambience. Connectivity with business centres and airports would be advantageous in this regard. Moreover, as money is not a constraint, the research and ROI projections must make the basis of high-net-worth investments of this kind.

Connectivity Quotient

The ultra-rich class does not hesitate in spending money on a property with potential. However, the ROI potential of a property is highly dependent on a bunch of factors and connectivity is one of the foremost of them. The luxury property owners belong to the affluent class of society and prefer to live in a prosperous and all-inclusive locale. Proper road connectivity, linkages with the airport and railway station and metro links are absolutely necessary for luxury property owners. In fact, the very high price tag of the property is directly related to its superb connectivity  with leading landmarks of the city.

Goal of Investment

There is no doubt that luxury property comes with a heavy price tag. Even if the investor has money to spare, the purpose of investment in a luxury property must be clear. It must be well-defined that the property is being bought for self-occupation or for rental income. If it is bought for self-occupation, factors such as social infrastructure and amenities must be up to date as this will directly affect the  quality of  living of the residents. If the property is purchased for rental purposes, it must be near the business centres and connectivity must be seamless. If the purpose of purchase is clear, the investment journey would be hassle-free and the only constant asset that consistently produces the highest ROI is real estate.

Finances

There is no denying the fact that luxury property investors do have deep pockets and they have a high budget at their disposal. Despite this, money cannot be wasted and must be invested prudently. Even if the investor has surplus money, he might want to avail of cheaper credit to buy a certain property. As banks are liberal with HNIs due to their sound financial position, they disburse loans almost instantly. The investor must have a plan to finance his prized possession.

In addition to the arrangement of finances, the investor can also ask for the right price. Just because he has money, doesn’t mean that he can buy at any price. In fact, by  getting  it at the right price , one may well  save a few millions in luxury property deals. One must be aware of the price trends in the region and bargain accordingly.

Conclusively, luxury property investment is not a cakewalk and requires thorough research as a lot of money remains at the stake. If luxury factors such as location, connectivity, ambience, physical infrastructure, and social amenities are researched well before making investment, you might be the owner of a high ROI generating luxury property.

Atul Goel, MD, Goel Ganga Group & Author of Real Rich

EVENT REPORT / NAREDCO FOUNDATION DAY 

Call For  Timely Completion of Projects 

In the backdrop of  Indian real estate bouncing back from the pandemic lows, a call was made at the special webinar of the apex industry body of real estate developers- Naredco for the timely completion of projects by making use of technology to collect data for better planning.

This call was made by Gautam Chatterjee,  former chairman of Maharashtra Real Estate Regulatory Authority (MahaRERA) while speaking at a webinar organised on the occasion of the Foundation Day of Naredco , an apex real estate body set up in 1998 under the supervision of the Ministry of Housing & Urban Affairs.

On the occasion of 24 years of Naredco’s existence, Mr. Chatterjee emphasised on the need to focus on 3 Ts — transparency, trust building and timeline adherence. Transparency would include online disclosures, accountability and empowering home buyers to make informed choices. Trust building would bridge the trust deficit between developers and home buyers , through  a robust grievance redressal mechanism.He added that  developers and industry bodies like Naredco should effectively deal with stressed projects, steering them  towards their completion. Noting that many a time large inventory is based on faulty planning and lack of data, Chatterjee called upon  the industry to use technology to create reports based on industry data.

Dr. Niranjan Hiranandani, Vice Chairman, Naredco said that the key industry body under the aegis of the Union Ministry of Housing and Urban Affairs has played a key role in several schemes of the government including the formulation and implementation of the Pradhan Mantri Awas Yojana (PMAY) with Naredco’s digital platform of ‘Housing For All’  being a key milestone for the real estate sector.  He said that despite sanctioning over 1 crore houses under PMAY , there is immense opportunity for the government and developers to provide affordable housing to slum dwellers in cities like Mumbai. Observing that the SWAMIH Fund for the last mile funding of stressed projects was helpful for the sector and the distressed homebuyers, Dr Hiranandani hoped that more funds will be created for last mile funding.

Rajan Bandelkar , President, Naredco called upon  the industry participants to focus on the needs of homebuyers inorder to make the sector more customer friendly. He said that Naredco should take the centre stage for all the stakeholders in the real estate sector including home buyers, investors and developers  and turn the body into  a nodal agency for resolving the issues faced by the stakeholders along with pivoting the  future growth.

Naredco’s Chairman Emeritus , Rajeev Talwar talked about the massive investment opportunities that lie ahead for the real estate sector. He said that the development of Enterprise and Service Hubs (DESH)  replacing the SEZ Act would lead to $100 billion dollars of investment into buildings and a major space to look forward to by the real estate players. He added that making concrete homes for the growing urban population would lead to investment of Rs 65 lakh crore. Hiranandani concluded that in the next few years the opportunities for real estate growth are huge.