Why You Shouldn’t Invest In An Assured-Return Property In Noida
by Priya Sharma ExecutiveWhenever you move into the property market, you
always find ads appearing here and there about “properties on assured returns”.
Most of these offer as high as 12% per annum “assured” return on an upcoming
residential or a commercial project. So, are you going to buy a property in New Project Bhutani Cyberthum on 12%
return on a long-term appreciating asset? It might sound you too good to let
go. So, let’s discuss here more on it.
Assured Return
In Real Estate
The assured return should be understood as the fixed
monthly return given by the builder. It is given on the amount buyers invest.
That’s why you might have found some real-estate agents offering as high as 90%
of your invested money. Most of such returns are offered on under-construction
commercial properties such as; space in business park/IT Park, malls, shopping
plaza, studio, service apartments etc.
What to Check
Investing in a new project on the assurance of 12%
return can be considered. But, always remember that when an assured return is
offered, a formal agreement between the buyer and the seller is executed. Your
seller will promise to give you the assured sum each month until a particular
period of time. Sometimes, these returns are offered till the date of
possession; up to 3 years from the date of investment; and returns till the
first lease.
Benefits for
Builders
Due to a high number of investors in the real-estate
market, everyone is vying for well-known builder properties. In such a
situation, some new ventures often find themselves less creditworthy. Due to
lack of credibility in the eyes of the banks and private equity (PE) that
traditionally fund the business, these builders are forced to turn to various
other funding options like getting hold of bank finance. Assured returns can
also be considered one such funding for the project.
Benefit for
Buyers
Most builders generally sell these return-assured
properties at a higher rate and the investor ideally gets back the excess
amount paid to the builder. Getting the invested money in monthly returns is
just satisfaction for the loss of money paid.
If you are looking to buy a property in New Project Bhutani Cyberthum, Noida
Expressway, then stay away. There are dealers that can offer you the genuine
prices at much lower rates. Return-assured properties have very high-risk
(almost 90% of the cost is paid upfront to the developer) and high-return
category of assets. For an investor, it may work. But, working class and EMI-based
buyers should refrain from such purchases.
To sum up
If you are eager to try the assured return scheme,
you should go for the scheme which guarantees the assured return till the first
lease. Also, make sure that the builder is selling the property at a fair
market price. Don’t get tempted to buying property in New Project Bhutani Cyberthum in Noida on such assurances without
checking the MRP. Moreover, the return should be made through bank accounts,
not cheque and other means.
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Created on Jan 1st 2019 11:32. Viewed 408 times.