Real estate business has made most number of the millionaires in the history.
Real estate business is simply related to the property which you could use to
generate wealth. There are various ways to use property to make money.
This blog is not only about how to do utilize your property but also about how you can grow your money
By Sale (Without loosing property) : -
This is a method of making money by the sale of property . Sale of property is common but how to sell property without loosing property? That is the question
Sale of property can generate wealth if you had bought the property or you own one there is a method of selling & Utilizing the property in such a way that you won’t even Loose the property.
I called this method “The Perfect Utilization of LAND method”
Here is how
Suppose you have a 2000 Square feet of Land in City and it is worth 50 Lac (the price may vary in your city the numbers may vary)
If you simply sell the property you will just get 50 Lac but the Modern way is to Find a contractor who is ready to invest in your property
50 lac for land which you should get an Agreement to build a 5 story building with 3BKH Apartment one on each floor. The contract will be that you want 50 lac of your land + an apartment.
The cost it will take to make a 5 floor apartment will be around 1.1 CR (1 Crore 10 lac) approx as of now may vary city to city.
The contractor will pay you the money of the land after selling the apartments.
The contractor will give you 1 3Bhk apartment which worth 50 lac at-lest and the rest 4 apartments will get him around 50 lac each 4 times that is 2 Crore
The contractor will pay you 50 lac for land & 1.10 Cr in building that is total of 1.60cr and he will get 40 Lac profit just at the end of the project.
Now you must be thinking that from where will the contractor get 1.10 Cr to invest so at initial stage for building the apartment but when the Project is started and people usually buy property when its not even ready, to buy it at comparatively lower price as if its ready the price Goes up so even if he sells the first 3 apartments he could collect 1.5cr which was more than enough to complete the project the same money could be used to complete the project and you don’t even need to put a penny & even contractors never put money from their pockets even if they do they sell it and recover it & Contractors have contact with dealers who are ready to sell property on commission or know the people who are hunting for property who will even do the job of finding people who are ready to buy at a small commission.
Earlier if you would simply have sold your property which was not more than 50 lac
By using this method you got 50 lac for your land + 1 apartment worth 50 lac which you could sell or rent out and earn around 15k – 20k as Rent
You can also use this Apartment rent amount to further pay the E.M.I for any new property you acquire.
Suppose
You are done with the Deal and you have 50 Lac cash and an apartment worth 50-60 lac
Now you rented your apartment for 20k a month (you will get 22-25k for a 3Bhk apartment easily taking the minimum value)
You want to buy a land that is 1000 Sq feet in a city let the price be 25 lac
Wallet balance – 50 Lac cash
How you purchased it
Cash Paid – 15lacs (out of 25 lac)
E.M.I - 13900 x 72months (6years)
25 lac paid
You took 6 years to pay the E.M.I as you have bought the property for 15 lac cash and rest you Paid in E.M.I from the money you were getting in Rent 20k a month from the apartment
After 6 Years your
50 lac – 15 lac = 35 lac
35 Lac cash
You had this amount and you could have deposited the amount in Fixed Deposit or Mutual funds to grow your money but
Calculating only the basic 4% Interest that you will get on saving account
1st Year = 3500000 x 4% = 140000
2nd Year = 3640000 x 4% = 145600
3rd year = 3785600 x 4 % = 151424
4th year = 3937024 x 4 % = 157480.96
5th year = 4094504 x 4% = 163780
6th Year = 4258284 x 4 % = 170331.36
Total amount = 4428615 (Approx 44 lac)
*6100 x 72 months = 4,39,200 I.N.R (4 lac 40 thousand)
Total = 44 lac + 4 ,39,200
4839200 (48 lac)
- An apartment worth 50 lac which appreciated in value by 10 lac
- A new land for 25 lac now worth at least 30-35 lac for which you paid E.M.I from the apartments rent
- now the rent for apartment increased by 5k that is 25k after 6 years
The appreciation in value is not real and considered minimal
*You were getting 20k from the rented apartment you paid 13900 as E.M.I
So 20000 – 13900 = 6100 a monthly.
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