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Passive Income through Real Estate
What is a Pre-leased Property?
What is a Pre-leased Property? A Property that is already Leased to a Tenant and then Sold to a Buyer along with that Rent as Income.
PRODUCT VIEW
| Asset | Pre-Lease (Commercial) | Residential |
|---|---|---|
| ROI | High rental yield (6-12%) | Low rental yield (2-4%) |
| Lease Tenure | Long term (5-15 years) | Short term (11 months) |
| Maintenance | Tenant’s responsibility | Owner’s responsibility |
| Capital Appreciation | 5-10+% p.a. | 1-2% p.a. |
| Demand & Supply | Over demand, under supply | Over supply, under demand |
| Loan Eligibility | Loan against rental income | |
| Supporting entry level investor | Loan against financial statement, require experienced investor |
TREADING IN REAL ESTATE
CASE STUDY
TRADING IN
REAL ESTATE
Challenges faced by Builder
A reputed builder based out of Baner was looking to sell his entire floor plan of 21,000 Sq. ft., had he opt for one to one sale of the Property to Individual Investor, his objective of accepting Payment in Ratio wouldn’t have been possible, also the pricing/commercial wasn’t justifiable for one to one Sale; due to this, the builder couldn’t even advertise to attract the right kind of Buyer.
Challenges faced by Buyer
Todays’ buyers are not only looking for Ready to Move properties they want Pre-Leased Property so that they can enjoy Rentals from Day 1, and they want it at entry level cost which is a big challenge when it comes to Pre-leased Property.
SOLUTION
Builder
Sold the 21000 Sq. Ft. Space at 9000/Sq. ft. to the Trader, usually it takes months to sell this much space, builders have to spend a lot on Sales & marketing to acquire individual customers, hence selling 21000 Sq. ft. in one go was very cost effective for Builders.
Buyer
With international brands occupying the premises with long term Lock in & Agreement, investor made above 8% ROI at an entry level ticket size, pretty good, right?
Trader
Now remains the Trader, the Traders are cash rich individuals looking for excellent proposals in market, as an intermediary our job was to get Builder, Buyer & Trader on same page and enable Hassle free Transaction. Due to our strong due diligence & personal connect with the builder, the Trader was able to acquire property at super prime location at an attractive cost which is must for any commercial investment.
BENEFITS
We, Dream Works Realty are proud to be part of this Success Story where we used our advisory network and connected Builder, Buyer & Trader to overcome their Challenges, achieve Goals, and create a win-win situation.
Builder
Trader who acquired the space at 9000/Sq. Ft., after we leased out the space to Tenants/Brands we were able to sell the same space at 13000/Sq.ft, so Trader acquired the space at Rs.18.90 Cr and was able to flip the same at Rs.27.30 Cr, the profit or investment gain was Rs. 8.40 Cr, the ROI was whooping 44.44%
Buyer
We worked closely with the Trader and divided the acquired 21000 Sq. ft. space into smaller units and Leased it out to multiple tenants/brands like LG, MNC, Int. Dance Academy at excellent terms, the reason for dividing the space was to allow buyers to invest at an affordable price and enjoy premium rentals, and hence by dividing & leasing we solved the Buyers Pain Point.
Trader
Now remains the Trader, the Traders are cash rich individuals looking for excellent proposals in market, as an intermediary our job was to get Builder, Buyer & Trader on same page and enable Hassle free Transaction. Due to our strong due diligence & personal connect with the builder, the Trader was able to acquire property at super prime location at an attractive cost which is must for any commercial investment.
