Assured Returns in Real Estate

Assured Returns

What is Assured Return?


Assured Return these days is a popular concept in the real estate industry. In simple words, Assured Return an interest or return on money invested by an investor at an agreed rate. Assured Return also has the concept of capital appreciation involved. Capital appreciation simply means the rise in the value of an asset based on the rise in market price.


The rate of return assured to the buyer is decided by the developer and usually fixed in advance and offered to all the clients investing in that particular project

Why to invest in Assured Return Schemes?

Assured return is one such plan that attracts buyers faster than any other. It is one of the safest and low-risk investment plans. Assured Returns are given by the builders to the investors who invest in their under construction project. These projects are mostly commercial projects such as space in Business/IT Park, Malls, Shopping Complexes or Studio/ Service Apartments; but lately this concept is coming in residential retail market as well. Assured Return Schemes prove to be beneficial to both the builder as well as to the investor/buyer.

Who should invest in Assured Return Schemes?

This new age concept is beneficial for all those who have got money to invest and are looking for a steady monthly income. As the young investors are being lured by the regular investments, the senior citizens are not behind too.
Assured Return Schemes gives monetary security to the senior citizen by offering them a steady income every month. The people investing in Assured Return Schemes mainly cover retired citizens, NRIs and all those who want to invest in the commercial property.

What Benefits does one gets?

The trend in the commercial sector is to rent a space instead of buying it. This ensures low risk and lesser worry on maintenance. So, it is always a win-win situation for any investor putting his money into such commercial property.

• Provides investors with a fixed monthly income – most developers provide bank guarantee hence adding   security to the transaction.

• Those investing in assured return property can take double advantage of their investments growing & at the same time get returns from day 1 from their assured return property.

• The rate of return works out much higher if you factor in the rental income along with growth in capital value   of the assured return property.   

• The size of investment is much smaller compared to other properties.

What are the risks involved?

Every investment has a risk involved and so does this luring scheme too. The biggest risk involved is: what if the developer suddenly stops paying the monthly payment or what if the commercial site never goes on lease? For such a situation, the solution to this danger lies in including a recourse plan in the agreement to safeguard the investor’s interest.

The reputation, quality of past projects, legal clearances and requisite approvals decide whether a builder is worth trusting or not. Bank security is another major point to be kept in mind for a safer investment. Many builders these days have started giving bank assurance.

If one chooses a reputed builder the risks involved can be avoided making the investment safe and secure.

Property in Gurgaon

BUDGET 2013-14: Impact on Real Estate Industry

‘Realty sector of any country is capable of uplifting country’s economy’

Real Estate Industry has gained an altogether new status in past few years. The industry has seen major ups & downs in the last few years. Allowing FDI in 2002 was a major turning point for the Industry. Though, last year has been challenging for Realty sector but, this year is predicted to be a mixed bag of opportunities.

To buy a house and keep it forever is typically an old story. Now, people want to invest in property as they see investing in Property a safe and a high return solution in comparison to stocks or mutual funds.High Interest rates, low economic growth are the prime reasons behind a fall of 12-13 percent in the absorption rate by the customers. Due to this slow down, the Builders were launching fewer projects in the market.

Not only the Realty sector but also the investors were hoping a lot from the Union Budget 2013. The demand of Real Estate Industry was to lower the interest rates on loans and simplify the process of approvals and increase the process transparency.

Finally on 28^th of February, Mr. Chidambaram announced his 8^th Union Budget. He announced to start an Urban Housing Fund to match up the huge shortage of houses in the urban areas. Mr. Chidambaram quoted in his speech that, “I propose to ask National Housing Bank to set up the Urban Housing Fund and, in consultation with RBI, I propose to provide Rs. 2,000 crore to the Fund in 2013-14”. To boost up the sector further, another clause has been added for the first-time home buyers. The first-time investors availing up to Rs 25 lakh in 2013-14 can get an additional interest deduction of Rs 1 lakh in the first year above the existing 1.5 lakh benefit.

Apart from this, the allocation towards the Rural Housing Fund has been increased to 50%. For the luxury and premium apartments the abatement in service tax has been reduced to 70% from 75%. This would result in an increase of about 0.6% in effective service tax rate. The Budget for 2013-14 also proposed to levy a one per cent TDS on properties of above Rs. 50 lakh.

The Impact of Budget 2013-14 is neutral providing a little encouragement to the market. This Budget is expected to bring liquidity for the urban housing and thus increasing the demand in the industry.

Property in Gurgaon