Why You Shouldn’t Invest In An Assured-Return Property In Noida

Whenever 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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