Monthly Archives: March 2015

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.

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Pyramid City 1 Phase 1

Imagine an uninterrupted view of nature from your window. Imagine shopping trips that never feel like a chore. Imagine a little more time with your loved ones. Here’s a home that gives you all of life’s pleasures.

Pyramid City-I, an integrated township with all the amenities you need to live the life you always wanted. A township with a Mediterranean soul both in its terraced layout and in its architecture. Pyramid City-I is strategically located near Nagpur, in the lush green landscape of Jaripataka, with the hills of Ramtek NearBy as its neighbours. Which means peace and convenience have finally found an address where they can coexist.
Designed by reputed international architects , Pyramid City-I is distinctively Mediterranean in its style. Starting with the terraced land, the buildings feature porticos, classic arches, cut stone facades and terra-cotta railings. Even the materials used – stone, red roof tiles, wrought iron and stucco – owe their origins to Mediterranean architecture.

The spaces in and around the township follow the same design style. There are walkways and pebbled garden paths within and between the building complexes, and lush greenery and lawns throughout the open plazas and courtyards.

Another very important aspect of Pyramid City-I is the sense of belonging that is created by the architecture. The buildings are designed to open to each other and create community spaces between them. You’ll see it in the interior courtyards, the open public squares and the communal gardens in the township.

This provides premium housing location to the 3 BHK units and provides them the best uninterrupted views.