Functional Real Estate – A New Era in Investment

“Over the years, real estate has proven to be the most profitable investment option. Unlike equity investment, investing in real estate is easy, less confusing, and yet beneficial in many ways. There is an immense demand for immovable properties, which helps the property owner or investor to gain profit from rentals and a market appreciation.

As an investment option, second homes mostly face some hesitation as this investment invites a fair amount of after-purchase expenses. These unavoidable expenses include housekeeping, maintenance, and security. These can weigh into the entry price and slice your pockets rather than providing a supplement to your profit.

From an investment point of view, second homes provide ROI in the form of capital appreciation of the property. To avail this profit, the property has to be held on for a certain time period until the balance of entry price and exit price becomes profitable.

During the waiting period of capital appreciation, the property is more likely to stay unused, excluding the occasional usage for the family weekends and vacations. In other words, the property will be vacant for the most part of the year, which can raise a concern of maintenance and security.

Any property that is not in use and not pulling in ROI is as good as dead property. In the case of second homes, the property stays vacant until it gains capital appreciation and until then the ROI can be gauged only in the form of its usability. There is a considerable time gap between the investment and the price appreciation, and to fill this gap, the concept of a Functional Real Estate took birth.

A functional real estate is a concept that refers to the second home investment, which operates on the owner’s behalf and fills the gap between entry price investment and return of investment with persistent money flow. This is an upgrade to the traditional second home concept, which will help the investor to use the property to its full potential and maximize the profit outcome.

Functional real estate usually operates, on the behalf of the owner, like a resort or other hospitality establishment to generate revenue. These pre-furnished properties are well equipped with lifestyle facilities and amenities, which leaves no space for furnishing and equipping expenses.

The investor, being the actual owner of the property, gets an ample amount share from generated revenue (almost 65% partner in the profit), which is a hire-charge of the property. Along with the revenue share, the owner gets to use the second home as per his convenience and will.

Overall, it is a newly emerged market trend, where an investor of a second home gets various profitable benefits from the property while enjoying the luxury and hospitality of a World-Class Resort.

This is simply a full-scaling of a property, where an investor owns an asset that takes care of itself, maintains itself and most importantly it earns for itself and the investor. For those who want to invest in a second home as a long haul investment, a functional real estate can be the most promising investment.

Earlier, a typical real estate investment involved an investor buying multiple property/units in an urban area, which was used to provide relatively low Rental Income (between 2% - 3% p.a). Once rented out, the owner can not use the property/unit until & unless the tenant vacates it. Thus, the invested unit, with a usability issue and a low investment option, turns out to be an awful investment option.

On the other hand, Functional Real Estate offers a much higher ROI (7% - 10%) and the owner or investor, as & when he pleases, can use the property/unit. The property of an urban area experiences market appreciation based only on the real estate market uptrends. But as compared to an urban area a Functional Real Estate experiences an enhanced market appreciation which is largely affected by not only the real estate market uptrends but also by the Resorts/Hospitality Business growth.

Thus, the investor gets returns in a combination of 2 business markets allowing the property to gain increased price appreciation.

One such, Functional Real Estate project is Pushpam Sanskruti by Pushpam Infra, located at Karjat valley. It is a beautiful project that will help you achieve your short term as well as long-term investment goals.