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Why Is Investing In Nagpur A Smart Investment Decision..?



Why Is Investing In Nagpur A Smart Investment Decision..?
KPN photo

Nagpur: According to a recent survey done in US and published by Silicon India, Nagpur has been rated as the best city to live in India based on factors such as quality of life, public transportation, greenery and health care services. Nagpur is the third most populous city in Maharashtra. It is famously known as the orange city of India due to the famous Nagpur Oranges which grow here and are imported all over the country.

The literacy rate in Nagpur is very high. It is about 93 per cent which makes it one of the most literate cities in India. Housing here is available across various price ranges. If you are planning to invest in Real Estate Nagpur, this article will tell you why it a smart investment decision.

Political Hub: Nagpur is the place where Maharashtra State Assembly holds the winter session annually. Nagpur is also the headquarters of the Rashtriya Swayamsevak Sangh (RSS), which is a major political organization in the country and is 89 years old!

Connectivity: Nagpur is very well connected to the rest of the country via roadways, railways and airways.

Airport: Nagpur has an international airport. It is now easily connected to the rest of the world especially places like Singapore, UAE, United States of America, United Kingdom and so on. This has really become a boon for residents of Nagpur.

The process of expanding the airport is under way and now we will have a Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN). This project is dived into 2 parts. The airport will also serve as a cargo hub. Secondly, there will be a Special Economic Zone(SEZ) which will also have a residential zone spread across a wide area of land.

Industrial Activity: The industrial activity happening in and around Nagpur has benefitted it greatly, escalating its real estate prices. It is mainly known for its mining industry. There are many government-owned mining companies with headquarters here. It also has the very famous Butibori Industrial estate, which is the biggest industrial estate in Asia. It has companies like Gammon India, Hyundai Unitech, rama Synthetics, ACC Nihon Castings etc. On the west of Nagpur there are over nine hundred industrial units. Some very prominent companies are based here like Haldirams, Vicco, Ajanta Toothbrushes and Mahindra and Mahindra.

Educational Hub: There are some top-quality educational institutes located here. This area had over thirteen medical colleges and twenty seven engineering colleges. Indian Institute of Management (IIM) and All India Institute of Medical Services (AIIMS) are opening up branches here.

Metro: Just like the rest of India, places within Nagpur will now be easily connected with the Nagpur metro. The metro will have thirty six stations. As of now the metro is under construction. This will reduce the congestion and traffic jams in the city and further boost the economic development.

Tourist Attraction: Nagpur attracts a lot of tourists. Sitabuldi Fort, Seminary hills, Deekshbhoomi, Maharajbhaj Zoo, Aadasa temple etc. are some popular tourist destinations within the city. Nagpur also has many natural and artificial lakes. Ambazari Lake, Shukrawari Lake, Futala Lake are some of the popular lakes here. It also has many tiger scantuaries. Bor Tiger Reserver, Pench National Park, Melghat Tiger Reserve Tado- Andhari Tiger Reserve etc are some famous tiger reserves in and around Nagpur.

Pleasant Climate: Even though it is very hot during summers, all the other seasons are very pleasant here. Nagpur enjoys plenty of rainfall and cool winters.

Quality of Life: Third greenest city in the country. The standard of living is high here. The infrastructural and social development in this place has made the quality of life great.


Realty market of Nagpur rural makes a spectacular comeback


Stamps and Registration office of Nagpur rural area mopped up 203 per cent revenue from real estate transactions during 2014-15.

THE real estate market in rural areas of Nagpur district is once again zooming in the hope that BharatiyaJanata Party (BJP) andShiv Sena led State Government can take some favourable decision for the growth of realty sector. During last financial year (2014-2015), Stamps and Registration office of Nagpur rural area mopped up 203 percent revenue from real estate transactions. But, at the same time, Nagpur city registered downward growth and achieved only 80 per cent target, highlighting slump in realty market. Though disappointing in termsof number, the city has contributed Rs 675 crore by way of stamp duty as against the target of Rs 839 crore and is remarkable considering weak demand for high-end flats. This is clear indication that property buyers are now concentrating more on properties in rural areas and those situated just outside existing municipal limits since properties inside city areas are costlier. The figures of Stamps and Registration Department of Nagpur division show the clearcut picture of changing trendand migration from city to rural areas, where metro region is coming and on Wardha Road, even the Metro Rail is proposed. However, experts stated that this could not be termed as jump in the sluggish realty market. It may be mentioned that Union Minister NitinGadkari and Chief Minister DevendraFadnavis have assured property dealers to start improvement in the rural sector. They had batted with previous Democratic Front Government for granting permission to layouts and small townships upto 750 meters from Gaothon. As per clause, the layout situated upto 200 and 300 meters can get permission for changing from agricultural zone to yellow zone for construction purposes. During DF Government regime, Town Planning department official had granted illegal non-agriculture permission to several layouts beyond permissible layout. Taking corrective step, then Collector PravinDarade had rejected around 250 non-agriculture permission and issued stern guidelines to stop unscrupulous land dealers from exploiting people, due to which growth of real estate business in rural areas slowed down. Now, the winds are flowing towards northward direction hoping that the new Government may amend the clause and provide relief to them. Earlier, Fadnavis and Guardian Minister ChandrashekharBawankule also raised the issue of illegal colonies at BesaBeltarodi, Ghogali and others in the vicinity of orange city at various forums of the Government to legalise it. Presently, they are at the helm of affairs and people believe that they can regualrise these constructions by framing guidelines to ensure planned development. New Government has also given attention towards development of stalled MIHAN-SEZ project. Till now, the project failed to take off due to various reasons but with a big push from Chief Minister Fadnavis and Union Minister Gadkari once again the project has been revived. Air India has started maintenance of aircrafts at Maintenance, Repair and Overhaul (MRO) depot. This has also increased expectations of common man regarding development of Nagpur and Vidarbha region. Experienced by earlier trends, the Stamps and Registration Department had set target of Rs 75 crore only from Nagpur rural area while a sum of Rs 839 crore is expected from Nagpur city, Rs 56 crore from Bhandara, Rs 64 crore from Chandrapur, Rs 53 crore from Wardha and Rs 8 crore collection from Gadchiroli. Nagpur city and Bhandara district did not achieve the target while other areas have crossed the target. Gadchiroli witnessed Rs 13 crore (162 per cent) transactions of stamps papers, while WardhaRs 58 crore (109 per cent), and ChandrapurRs 64.50 crore (102 per cent). Bhandara mopped up only Rs 53 crore (94 per cent) and Nagpur city only Rs 675 crore (80 per cent) and Nagpur rural area mopped up Rs 152 crore (202 per cent). It may be mentioned that earlier, real estate business in Nagpur rural market was a low key affair. Till 2008-09, it was Nagpur rural that had spearheaded realty growth when Wardha road land was sold like a hot cake. The land and open plot transactions had registered a tremendous growth then. However, the enthusiasm was cooled down with failure of MIHAN and regulatory issues like NA permissions, probe conducted into bogus NA nod leading to delay in sanction by town planning department. This had shifted the growth from rural to city areas. Now, once again market may be shifted from city to rural areas. In orange city, new rates of Stamps duty fetched crores of rupees for the State Government. The Stamps and Registration Department is charging 6.5 per cent (including 1 per cent of Local Body Tax). The abolition of LBT from August 1 may also provide a great relief to buyers.

RBI‬ cuts ‪repo‬ ‪‎rate‬, ‎third‬ time, by 25 ‪‎bps‬

Police officer stands guard in front of the RBI head office in Mumbai

As widely expected, the Reserve Bank of India cut the policy rate (repo) on Tuesday by 25 basis points, the third time this year, to 7.25 per cent from 7.5 per cent. The repo rate is the rate at which the RBI lends money to banks.
But the move comes with a message that any further cut this year is unlikely. Articulating the concerns of the RBI over the expected poor monsoon and crude oil prices, Governor Raghuram Rajan expressed fears that a monsoon shock could push up food prices and challenge its control over inflation.
The stock market reacted negatively to the move, shedding 660 points. And India Inc. is fuming that the cut is too little as they expected a reduction of at least 50 basis points.
The RBI cut rates by 25 basis points each in January and March from a peak of 8 per cent. But the benefits of these cuts did not reach consumers fully, as banks showed reluctance to pass on the benefits.
In the previous policy announcement — the first bimonthly policy for 2015-16 on April 7 — the RBI had maintained status quo in the repo rate at 7.5 per cent, saying that transmission of policy rates to lending rates had not taken place despite weak credit off-take and the frontloading of two rate cuts,
Later, several banks cut lending and deposit rates. Tuesday’s cut is an incentive for banks to reduce rates further.


Key Reasons To Invest In Real Estate

The global economic recession of 2008 is often linked to the United States housing bubble and subprime mortgages. In the aftermath of the recession, there was much negative sentiment over the real estate sector and few were inclined to consider investments into the sector, in a positive sense.

Tutorial: Exploring Real Estate Investments

However, real estate investment is simply the purchase of a future income stream from property and quite undeserving of the tarnish to its reputation. Here are some of the key reasons to invest in real estate. (For a complete look back at the mortgage meltdown, check out our Investopedia Special Feature – Subprime Mortgages.)

Competitive Risk-Adjusted Returns
Based on data from the National Council of Real Estate Investment Fiduciaries (NCREIF), private market commercial real estate returned an average of 8.4% over the 10-year period from 2000 to 2010. This credible performance was achieved, together with low volatility relative to equities and bonds, for highly competitive risk-adjusted returns.

Critics would argue that the low volatility characteristic of real estate is the result of infrequent real estate transactions. This means that property values are often determined by third-party appraisals, which tend to lag the market. The infrequent transactions and appraisals result in a smoothing of returns, as reported property values underestimate market values in an upturn and overestimate market values in a downturn.

While it’s true that historic estimates of real estate volatility should be adjusted upward, real time markets are vulnerable to sudden unexpected shocks. A good example of this would be the “Flash Crash” of May 2010, when $1 trillion in stock market value was erased in just 15 minutes. In an environment where market volatility is an issue and the dynamics of algorithmic trading are murky, the more stable pricing of real estate is attractive.

Why You Should Be Investing Your Money In Real Estate

As entrepreneurs find success with their primary business ventures, many search for the proper investments for their profits.

Of course, we can and should all start traditional tax preferred vehicles like an IRA and 401k. These are the bedrock of good ‘benefit’ planning for ourselves and our employees. I’m also convinced more entrepreneurs should consider rental real estate as an important part of their portfolio.

I realize many business owners shrug off this concept after the recent downturn in real estate values, but let me list a few reasons that may change your mind:

1. Gain more leverage. Real estate is one of the few investment vehicles where using the bank’s money couldn’t be easier. The ability to make a down payment, leverage your capital, and thus increase your overall return on investment is incredible.

2. Grow, tax-free. Buying rental property based on speculation of its value is a dangerous tactic since cash flow is the key. However, appreciation over the long-run is certainly realistic and at the least you should be considering a tax-deferred strategy. In the future, you may even consider a 1031 exchange, charitable trust, or an installment sale to lesson your tax liability further.

3. Tax free cash flow. It’s no secret that because of depreciation and mortgage interest deductions (if you leverage your capital), your cash flow should be tax-free. That’s right! The far majority of the time an investor will never pay taxes on their cash flow and can wait for capital gains on the sale of the property in the future.

4. The tax write-offs against your other income. Depending on your classification as an Active Investor or Real Estate Professional and your income level, there is a good chance your rental property will not only give you tax-free cash flow, but an overage of tax deductions you can use against your other income. With that said, this is something you want to discuss with your tax professional before investing so your expectations are realistic.

5. Increased tax deduction strategies. Rental property affords investors with another incredible opportunity to convert personal expenses to potentially valid business deductions. Don’t forget that rental real estate is a business. This means that travel expenses to check on your properties and payments to family members who manage your properties (such as students away at college) can be deductible and increase the tax benefits when it comes to cash flow and the future sale of the property.

6. Rental real estate is a forced retirement plan. Americans are terrible savers. We lack the self-discipline to put a monthly deposit into our IRA, SEP or 401k as small-business owners. However, buying a rental property is a significant commitment that you are required to commit to and maintain. You will always be grateful in the long-run when you don’t give up on it and build future cash flow and wealth.

I meet with a lot of successful entrepreneurs, and almost every one of them has taken profits from their businesses over the years to invest in rental property. Based on this fact and the list above, I have consistently urged my clients to buy one rental property a year and already have clients with rental properties earning them money they never imagined they’d have.

The far majority of us will never get rich overnight. It takes long-term investing and a diverse portfolio to build true wealth. Don’t forget real estate as an important part of the equation.

How can NRIs benefit from investing in Indian real estate

The fact remains that the real estate prices in the world are sinking. But the real estate investment in India is ringing. This is the reality of the situation. To encash of this reality the Non-Resident Indians (NRIs) should now think of making investment in India in the real estate sector.
Believe me when I say that the investment by Non-Resident Indians if made today in the real estate sector, then surely it will bring higher appreciation in the years to come and that the investment made today will not bring any regret. Before venturing into investment in real estate in India, the Non-Resident Indians in particular should take care of the provisions contained in the Foreign Exchange Management Act as well as the Income-tax Act.
A fair knowledge of these two enactments will help the Non-Resident Indians to take a wise decision of investment in real estate keeping in view the provisions of law affecting such real estate investment.
As per the said Foreign Exchange Management Act an Indian citizen who resides outside India is permitted to acquire any immovable property in India other then agricultural/plantation property or a farm house. Thus, it is very clear that Non-Resident Indians enjoy almost all the privileges which are enjoyed by a resident Indian with reference to purchase of immovable property in India.
As per the said Foreign Exchange Management Act an Indian citizen who is a resident outside India popularly known as Non-Resident Indian has the permission for the following activities with reference to acquisition and transfer of immovable property in India :-
1. acquire immovable property other than agricultural land/plantation property or a farm house by way of purchase subject to the conditions regarding RBI rules mentioned in clause (a) of the Regulation;
2. acquire any immovable property other than agricultural land / plantation property / farm house by way of gift from an Indian citizen resident outside India or from a PIO;
3. acquire property by inheritance;
4. transfer by way of sale any immovable property other than agricultural / plantation property of a farm house by way of sale to a person resident in India;
5. transfer agricultural land / farm house or plantation property way of gift or sale to an Indian citizen resident in India;
6. transfer residential or commercial property in India by way of gift to a person resident in India or to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India.
Before making any investment in real estate the Non-Resident Indian should very carefully prepare the basic objective or the purpose of making investment in real estate sector in India. The strategy will be different in case the investment in real estate is made for acquiring a residential property for self use.
Likewise, the strategy for investment will be different in a situation where the Non-Resident Indian would like to buy real estate with the objective only of making money at the time of selling the property.
Reversely the strategy will be still quite different if a Non-Resident Indian who is interested to invest in real estate just with the sole objective of receiving a regular flow of money by way of rental income. Hence, the first strategy with reference to investment by a Non-Resident Indian in real estate would be to shortlist the specific purpose or objective of making investment in real estate.