Buy, Sell, Rent. These are the services we have come to associate with online real estate sites. Property portals are so fixated on these three services that they have lost focus on one of the most important aspects of real estate: real estate is not only a roof over one’s head but also an important way to save and build one’s net worth.
Investing in real estate is especially important because it is the most popular form of savings for a typical family in India – the amount of money Indians invest in real estate dwarfs their investments in financial assets such as mutual funds. The popularity of real estate as an investment stems partly from its safety – prices tend to move gradually, unlike in the fickle stock market. Real estate is also easier for the average investor to understand
The conventional real estate websites in India, unfortunately, have all focused on the needs of the end user of property and not the person who seeks to invest and profit from real estate. These sites don’t help an investor narrow down on the best property for investment, negotiate good discounts from the developers, or take steps to mitigate risks. A smart investor will rarely find a lot of the information that he needs to make his investment decision on these portals.
Lately though, this space is seeing newer entrants who are focused on the needs of property investors. While globally this space is exploding at a rapid pace, in India right now there are only a couple of portals catering specifically to investors looking at real estate options. The largest such company is SmartOwner. SmartOwner addresses the needs of a property investor by identifying the parts of the country that are growing the fastest and bringing deeply discounted properties in those locations to its clients. Deep discounts plus rapid growth increase the returns of the investor.
SmartOwner’s business model is an interesting one. Imagine going to a top developer and negotiating on a property. If you are good, you can probably get a 3% to 5% discount on the market price. Now, imagine going to the same developer with 10 of your friends who all want to buy. The developer will give you a bigger discount – perhaps around 6% to 8%. SmartOwner takes the power of groups to a whole new level – it brings together hundreds or thousands of property investors and negotiates steep discounts that can be as much as 30% below the market price. In this way, the power of crowds is harnessed to get properties at prices that are unavailable in the market.
And it’s not just HNIs who can invest through SmartOwner. The site also has an innovative model that gives investors a lot of flexibility with respect to the ticket size. This works by tying the price of the property to the amount paid up front – the more you pay up front, the bigger your discount. An investor with a smaller budget can pay as little as 25% or even less on a property and still get a bigger discount than what it available directly from the developer.
Another key concern for real estate investors is safety. A number of people have seen their savings stuck in real estate projects that got delayed or did not get completed. SmartOwner addresses this risk by going the extra mile to make sure that investments made through it have many layers of safety built in. Each property on the site comes with a legal title opinion from a leading law firm. In addition, projects, especially those in the early stage, are backed by a mortgage on the land. There are also strict penalties for any delay by the developer. These types of protections are aimed at addressing the safety concerns of investors.
SmartOwner’s well-thought-out business model thus addresses all the key needs of an investor – deep discounts for a higher return, a focus on safety, and flexible ticket sizes. This site, by focusing on the needs of the real estate investor, can help us all profit from the growth of India’s economy under the new government. Maybe that explains why properties on SmartOwner.com sell out very fast!