The real estate is new avenue for investment today. With real estate prices skyrocketing in India, investment in this sector will provide more returns than stock markets. Many builders are offering 12 percent assured returns on the investments in office space. The people are investing in the virtual spaces and lockable spaces in this domain. The private investment in office space is triggered by reluctance of banks to provide loan to developer. The banks are also demanding interest rates which are as high as 17-18 percent over such loans. Real estate developers have been exploring other options to raise money now.
The builders are now offering assured returns on the office space which ranges from 11 to 12 percent. The returns are issued on monthly basis even when the project is under construction. The pricing in such schemes is very dynamic. The structures constructed through such funding is more likely to be expensive. The builder is ultimately giving your money back to you along with charging extra for his own profit. The experts say that such properties are priced 40 percent more. This means more returns from the investor point of view.
There are two types of purchases involved in this. First is a virtual space selling. In this, the builder will sell you a hypothetical space in the building and guarantee you particular return on it. This transaction is purely for getting more returns through real estate. The physical possession of the space won’t be given to you. It also doesn’t involve maintenance and selling of property at higher price manually. Lockable spaces can be bought for creating your own office space or just to sell it for higher price according to the market. It is an actual real estate transaction and has to be gone through all formality. The investment you are making also involves customizing the space as per the future buyer of property. The physical possession of the space will be given.
Just like other investment options, the risk is involved in this one as well. Many times developers may delay the payment or may pay less than the assured return. One must review the performance of the builders in the market and how his projects have done in the past. Research about his sincerity by talking to present investors and his clients as well. You must to these things to avoid cheque bouncing later. Get the builder’s assurance through written agreement. Pay attention to current market conditions and demand in real estate segment. Also look for how much you can earn through rental. Sometimes rental may give you higher returns than assured returns in the virtual or lockable spaces.
The location of the project also matters in this process. The reputation of builder in the market for responding to complaints and quality will decide whether to go for the investment in his project or not. The virtual spaces are getting popular because developers are building large office segments first and then dividing it into various offices.