Realty check: reasons to seek expert advice

In a fascinating new study titled ‘The Rate of Return on Everything, 1870-2015’, five economists look at fundamental questions that have shaped our world over the last one and half centuries. Is land as lucrative an investment as stocks and bonds in the modern economy, they ask.

In most countries, the study found that the returns are on a par, while in some places like France and Japan, realty has fared much better. The message is loud and clear: real estate is a great long-term investment.

In India, thanks to key reforms such as the Goods and Services Tax (GST), the Real Estate (Regulation and Development) Act (RERA) and easing of FDI norms, investing in real estate is an alluring proposition today. The traditionally unorganised sector is seeing systematic changes, whereby processes are getting streamlined, bringing in more transparency and boosting investor confidence.

Unlike in the personal wealth management space, there is a dearth of professionally-run real estate wealth management services and advisory companies in India. Most clients in other mature markets hire professional real estate wealth management firms to represent them and negotiate on their behalf.

Whether it’s allocating capital to real estate with predictability of performance, or planning for retirement, or passing on wealth to future generations, it’s imperative to have an expert confidante, who can handhold you through the process.

What investors are looking for is an unbiased consultant — similar to a chartered accountant who assists with financial decisions — who can advise them to grow their realty assets across the lifecycle of ownership.

Here’s looking at five reasons why you need the expertise of a real estate wealth management advisory:

The counsel: When a 37-year-old IT consultant with an MNC had to move to the US for a five-year project, he had very little time to plan and execute work on his real estate assets. He wished he had appointed a professional real estate wealth management company who could provide personalised solutions backed by comprehensive understanding of the industry.

The paperwork: Right from sorting out the finances to getting the legal processes and documentations in place, real estate investments entail a lot of not-so-pleasant tasks. Imagine if you could simply entrust all of that to a reliable aide and enjoy a smooth, stress-free process!

For many clients, especially those based in another city or country, the hassles of investing in real estate seem to outweigh the returns. A competent real estate wealth management advisory can take the pain out of dealing with realty transactions, making it a positive and more satisfying experience.

The maintenance: Investing in a good property is only half the job; without proper maintenance, the capital suffers. However, most real estate investors today — not just NRIs and high net worth individuals — don’t have the time or energy to personally oversee property maintenance. Besides, finding worthy and reliable vendors to carry out maintenance work is quite a challenge.

It’s prudent to outsource the job to specialists, who have a proven track record. From doing the interiors within the budget to ensuring regular upkeep of the house, a good real estate wealth management company will have you covered.

The renting: Renting is often tricky business. However, it’s easier in the company of savvy associates, who are pros at finding suitable tenants, doing diligent tenant background checks, managing handover and takeover of properties, among other things.

The buying and selling: Most people are flummoxed by the choices when it comes to real estate investment. A good starting point is to analyse the real reasons for the investment (or sale). One needs to consider the impact of taxes, the legal status of potential investment, objective of the investment, right utilisation of the sale proceeds. These are all questions that call for in-depth discussions, which only a professional can help with, even before starting the execution process.

There’s a limitation to how much family and friends can help. With professional assistance, it’s a lot easier to find the best solutions that the market has to offer. In fact, a real estate wealth management firm can ensure seamless execution of all the assistance needed for managing your portfolio.

According to the latest PwC report, ‘Emerging Trends in Real Estate: The Global Outlook 2018’, realty continues to attract capital, demonstrating its stability and appeal over other asset classes in an otherwise uncertain investment world. It is a good time to invest in Indian real estate for diversification in the portfolio.

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(The author is Founder and CEO, Indiassetz)