Buying good real estate is about more than just finding a good place to call home.
You shoul rely on a registered company.
They may collect money from investors and buy real estate properties.
The capital plus profit is shared with the investors after selling the land.
The profit is divided based on the percentage of contribution of each investors.
Example of history of some real estate company.
In the year 2004, few friends pooled money and purchased land. They sold it for profit.
And they repeated this cycle few times by reinvesting the money. This proved profitable.
Others could benefit from this approach and hence COMPANY was born.
Sureties of real estates. They should say something like:
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"We circulate the land purchase title deed with the investors.
Along with that, an MOU is signed between each investor and COMPANY for the purchased land.
The MOU narrates the amount invested by particular investor (who is signing the MOU) and
money invested, percentage of all investors.
These docs holds a strong legal binding between your money and the invested land.
Can I pay by cash?
I would like to invest in COMPANY. Can I give money in cash?
No. We receive money through bank transaction (online payment or NEFT/RTGS transfer or cheque).
Same way, when we have to pay you back, we will pay through bank payment.
This is good for you, as you have an official record to prove your investment.
How much can I invest?
There is no fixed amount. Your profit is ratio of your invested money.
How do I transfer money?
Visit 'Invest' tab to know about the payment options.
As an investor, do I own portion of the land I invested?
COMPANY owns the purchased land. You have rights to give direction for the purchase and sale.
What are the expenses in purchasing a land?
Here are the expenses to anticipate:
legal verification
cost of the land
document preparation charges
broker commission - usually it is 2% (of the land price)
consultation fees for CONPANY - 5% (of the land price)
fencing the property (optional)
laying road - if needed (very rare)
Annual Maintenance cost - property tax, cleaning the land
When will COMPANY sell the land?
If a property is sold within 3 years of purchase, the sale attracts short-term profit tax.
We will try to hold the land for more than 3 years.
Investors will be informed about the land appreciation.
Once all investors are happy with the money growth, we can take a collective decision to sell the land.
If there is conflicting interest among investors, COMPANY management will brokerage between them
to arrive at a cordial solution.
What is the assured returns in this investment?
It is difficult to project the returns of a land. So, the company doesn't promise a return percentage.
However, going by the past experience, land investment is expected to grow more than double in 3 years.
Can I buy the land I had invested?
Yes. When decision is made to sell, you can opt to buy the same at the market price.
Few expenses like brokerage might be avoided.
Can I be sole investor of a land?
Yes. However, note that it will be cheaper to buy through a broker instead of going through COMPANY.
If you choose to purchase through COMPANY, the land registration can be done in your name.
Tracking the money
A beautiful webpage will be available to watch your investment and profit.
This page is under construction.
How easy is to withdraw my share?
To be frank, it is not easy. Land investment is not easy to liquidize, compared to gold, equity, mf, fd or other similar investment.
Plus point about real estate is, it steadily keeps rising and rarely dips down.
Considering the above points, this is how we can go about.
If you want to withdraw, we try to sell your portion to any of the current investors.
If not, we try to promote and bring in a new investor. This will take non-deterministic time.
Upon finding a replacement, You will get the initial investment plus the profit (based on current land price).
When all investors agree to sell the land, we start hunting for prospective buyer(s).
It takes time from search to completion of sale. This again depends on many factors and require considerable effort for fruitful result.
We will do this from our side and update you on each move.
On the other hand, if your money is still deposited in funds bucket,
then we will immediately release the money (minus management charges) to you.
Risk
Any real estate investment is risky. Things can go wrong in any stage - forged doc, encroachment etc.
We do legal verification before purchase. We prefer gated community for additional security.
Also, if needed, we fence the property.
We have a constant watch against encroachment.
Tax implications
When selling the property, we need to pay 30% of the profit as tax
NRI and foreigners need to pay additional TDS"
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That's the way to put things in right way.
