RESEARCH REPORT
ON

CUSTOMERS/INVESTORS PERCEPTION
ABOUT INVESTING IN REAL ESTATE

Submitted in Partial Fulfillment of the requirement for

The Award of degree of 
MASTER OF BUSINESS ADMINISTRATION
of 
Gautam Budhh Technical University, Lucknow

SUBMITTED TO SUBMITTED BY  
DR. S.K. SINGH SHIVANI RANI
Roll No. 0925070081

BBS INSTITUTE OF MANAGEMENT STUDIES

PLOT NO. 33, KNOWLEDGE PARK-III
GREATER NOIDA, UTTAR PRADESH

1
 

DECLARATION

I, Shivani Rana student of Masters of Business Administration from BBSIMS,

Greater Noida, Uttar Pradesh hereby declare that I have completed
Research Report on “Customers – Investors Perception about Investing in
Real Estate” as part of the course requirement.

SHIVANI RANA

2
 

ACKNOWLEDGEMENT

It is with the feeling of satiated and sense of Zenith that I draft this
acknowledgement note. I wish to express my gratitude to those who have
generously helped me to compile the Dissertation and stand up high, to the
expectation of the institute.

I wish to express my deep sense of gratitude to my HOD Dr. S.K. Mishra & 
Dr. Neeraj Saxena, Faculty Guide, BBSIMS, Gr. Noida their guidance has
aided me in the completion of this project.

I further declare that the information presented in this project is true and original
to the best of my knowledge.

SHIVANI RANA

3
 

TABLE OF CONTENTS

Chapter No Subject Page No

Ch. # 1.0 Executive Summary 6-7

Ch. # 2.0 Real Estate in India 8-9
2.1 Commercial 10
2.2 Residential 11
2.3 Retail 12-13
2.4 Growth Drivers of Real Estate 14
2.5 Major Players in India 15
Ch. # 3.0 Research Methodology 16-19
3.1 Primary Objective(s)
3.2 Hypothesis
3.3 Research Design
3.4 Sample Design
3.5 Scope of the Study
3.6 Limitations
Ch. # 4.0 Critical Review of Literature 20-21
Ch. # 5.0 Real Estate Investment 22
5.1 Industry Profile 23-24
5.2 Company Profile 25-28
5.3 SWOT Analysis 29
Ch. # 6.0 Study of Competitors 30-37
Ch. # 7.0 Data 38
7.1 Collection 39
7.2 Primary Data 40
Ch. # 8.0 Findings and Analysis 41-46
Ch. # 9.0 Recommendations 47-48
Ch. # 10.0 Bibliography & References 49-50
Ch. # 11.0 Annexure 51-53
Ch. # 12.0 Case Study 54-60

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CHAPTER 1

EXECUTIVE SUMMARY

5
 

EXECUTIVE SUMMARY

This research work is related to customers and investors research study, titled “CUSTOMERS
OR INVESTORS PERSPECTIVE ABOUT INVESTING IN REAL ESTATE ” in high
tech cities like Greater Noida, Ghaziabad, Noida and New Delhi.

The research addresses the factors influencing the customers and investors decision to allocate
resources to real estate. The survey includes a sample of major customers and investors via a
questionnaire. They answered question about their target real estate allocation, their plans to
increase or decrease their allocation, the major reasons for investing in real estate, and their 
view point on major factors which are to be considered by a company before starting a
company.

The major empirical findings are:

• Customers/Investors have a short history of real estate investment but are currently
increasing their allocation to the real estate, more so than Equities, Debt, and
Commodities.
• Legal and regularity risk, Hard to determine the best opportunities and Risk of 
poor professional advice are given as the risk involved for real estate investing.
• Despite of developers investing their large part of funds on Entertainment centers like
Shopping Malls, Multiplexes etc. large part of customers prefer to invest in Residential
Projects such as Plots , Group Housing, and Townships.
• Residential Property is gaining as an attractive mode of investment of middle class
 people leading to growing demand.
• With the shifting of more and more companies and offices to the suburbs, growth in
suburban residential real estate market has also been witnessed. Lavish townships with
good quality construction replete with luxurious amenities and facilities are now
coming up. Survey reveals the factors or specifications needed by the customers
where they are investing their funds and also the lack of facility in their previous or 
current residence.
• Despite the billions of money spent on brand advertising, customer’s rate – strength as a
weak influence at best on their purchase decisions.
• The most important factors influencing the real estate allocation decision are statistical
estimates of risk and return, advice from external consultants and long term historical
 performance.

During the course of this research work I was provided with an opportunity to interact with the
number of people to receive their responses for questionnaire gave a glimpse of the behaviors
of people and how a researcher should proceed to elicit the responses comfortably. The
experience gathered during this research study will help me to understand the real estate sector 
and customers perception about investing in real estate.

6
 

CHAPTER 2

REAL ESTATE IN INDIA

Source: Knight Frank Research

Real Estate Boom in India:

India, like many other parts of the world is zooming
away in the face of a real estate boom. In India there is a
real estate boom in any direction you wish to see.
Whether it is Bangalore, Pune, Calcutta or Hyderabad or 
even already sky high Mumbai and Delhi –the story is
the same.

7
 

 Now apartments are more than just houses. They are about lifestyle. So while the first
housing colonies had nothing but a security guard, these new housing colonies have a gym (spa,
Jacuzzi, steam), swimming pool (heated, lined with Italian marble).

Some have a multiplex, shopping complex. There are those which offer a servant entrance. The
next step is creating an ambience. What does on differentiate in a house? So you now have
themed houses.
The concern is that in India, the stock prices are at the height of a boom. As it happens, a
 boom in one sector translates into a boom in another sector with invertors rushing to park their 
money in a safe place. Also, add the foreign exchange glut in India fuelled to a great extent by
software engineers parking their dollar salaries in real estate (especially near the tech hubs ).
Low interest rates (relatively, as compared to 10 years back ) over the last few years made
 bank loans easier.
Driven by positive growth in the economy, real estate in India is booming. The year 2006
started as on a promising note when the Government of India opened the construction and
development sector in February 2006, and allowed 100 percent foreign direct investment
(FDI) under the ‘automatic route’ in order to spur investment in the vital infrastructure sector.
The government has thrown open the lucrative parts of the Indian reality market to global
investors for the first time.
The relaxation of the FDI ceiling saw big names joining hands with the Delhi based
developments to announce India’s largest FDI in the reality sector. Groups showing interest in
India include major Indian and International Companies.

The development of real estate in India focuses on two primary areas: retail and residential.
• The global real-estate consulting group Knight Frank has ranked 5th in the list of 30
emerging retail markets and predicted an impressive 20 percent growth rate for the
organized retail segment by 2010.
• The organized segment is expected to grow from a mere 2 percent to 20 percent by the
end of the decade, it said.

The boom is also attracting interest from foreign players. In recent years, non-resident Indians
(NRIs) have played a very important role in transforming the Indian real estate market.
Opening–up of the Indian economy provided them with new opportunities and they have shown
a great deal of confidence in the changed set up. Since 1994, NRIs have invested in sizeable
amount, of which a big chunk has found its way into the property market. Anticipation by NRIs
has brought about a lot of maturity in the market which in the past had solely banked on the
actual users.

2.1 COMMERCIAL

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• India has been hit by the global outsourcing waves. If IT/ITES continues to grow at the
estimated growth rate for the next four years it will be an approximately US$24 bn.
Industry by FY 2010.
• NASSCOM-MCKINSEY surveys have predicted that the ITES sector in India will
 provide jobs to 1.1mn sq. ft. of office space.
• Over the course of the past five to ten years, the major occupier of the commercial real
estate has been the IT/ITES/BPO sector as opposed to banking, finance,
multinational, corporate and large Indian manufacturing companies. Almost 80
 percent of demand for commercial space today is thanks to the above sector.
• Accordingly, a shift is happening towards cheaper and larger locations in the suburbs
closer to dense population pockets supplying quality workforce at competitive rates.
Thus, a gradual decline in the status of the CBDs, which is already experiencing
vacancy rates of over 20-30 percent, is expected over time.
• More and more developers are building quality built-to suit space catering to the end
user in the suburbs. In a nutshell, there will be a huge demand for commercial space in
suburban area of major cities.
• Most developers are providing a more efficient and better class of product than they
were five years ago. At cheaper costs. These products are of a global standard and
developers are using new age technologies in order to reduce delivery times.
• The capital values of commercial properties have moved up by 10-12 percent over the
 past 12 months, even though the rental values have remained the same. This disparity
will cease once the interest rates moving upwards.
• Looking into the future, we expect supply to continue to match demand. A number of 
developers will put up quality products on to the market, thereby stabilizing rental
 property rates.

2.2 RESIDENTIAL

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• Residential property is gaining ground as an attractive mode of investing for middle-

class people leading to growing demand.

• The residential market has picked up due to the lower interest rates coupled with
easy accessibility to loans.

• The increase in prices of residential properties nationally has been 15-20 percent. This
can be largely attributed to the increase in the land prices as well as the input costs.

• With the shifting of more and more companies and offices to the suburbs, growth in the
suburban residential real estate market has also been witnessed.Lavish townships with
good quality construction with luxurious amenities and facilities are now coming
up.

• The demand for good housing is evident, as most of these developments have witnessed
a pre-construction booking of 75-80 percent and even 100 percent in some cases,
both by end users and investors.

• There is the total national housing shortage of 41 mn. Units. Out of the above, close to
80 percent consists of housing for the weaker section.

• A study has shown that 50 percent of the formal housing in the country is accessed
through the rental route and not ownership. It is thus pertinent to put in place an
environment to encourage more stock of rental housing.

2.3 Retail 

• Retail is considered the world’s largest private industry with total sales of US$ 6.6tn.
With close to 12 mn. Outlets, India has the largest outlet density in the world. The
consumers demand for international quality ambience, convenience and infrastructure
will drive future growth.

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• Retailing is becoming the next boom industry with organized retail being a market of 
US$6 bn. It is due to the growing eight fold in the coming decade. It is expected that the
share of modern retail shall grow from about 8 percent in 2007 to 20 percent by the end
of the decade.

• The total retail industry growing exponentially at 8.5 percent per annum and consumer 
spending has increased at 12 percent per annum during the last 3 years.

• The Indian consumer today is evolving. The increased purchasing power of the urban
educated middle class, more exposure to brands and products through television and
foreign trips, and the growing number of working couples has led to a change in buying
habits and thus the retail scope in India today about 50 mn. Sq. ft. of organized retail
space will be coming up across the country by the year 2010.

• However, the real estate industry is at a critical point. Currently, we have a depleting
 pool of retailers and successful department store chains with a lot of shopping center 
space competing for the same tenants. This accordingly, creates an opportunity for 
foreign retailers. There is a dire need to allow 100 percent in retailing.

• Developers who can show most ingenuity in creating an interesting environment, both
from a shopping and an experimental standing point, will be the ones that will create an
asset that will withstand the test of times.

• A notable trend in the market is the development of integrated retail-cum-entertainment

centers. An increasing number of retailers are focusing on malls as opposed to stand-
alone developments. Several factors determine a retailer’s attraction towards a
 particular mall. A recent survey revealed that, for a retailer, the most important
 parameters in selecting a mall as a potential location are:

1. Consumer demographics

2. Developer reputation

3. Cost of leasing space

4. Quality of other tenants

5. Car parking

6. Support facilities

7. Infrastructure
8. Maintenance

Whilst the number of shopping malls has seen a surge in the recent past, the future development
is now focused on providing for leisure activities as well. A significant number of multiplexes
are being developed as an integral part of retail malls, along with amenities such as food courts
and video game parlors. PVR, INOX, Satyam Cineplex’s and Shringar Films are diving the
multiplex business expansion across the nation while Appu Ghar, The Delhi Based Amusement
Park, has plans of starting operations in at least two new locations.

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The next step in the evolution of malls in India is specialty malls and theme malls that
cater to a specific target audience. These would include wedding malls, auto malls, home
accessories and life style malls, factory outlet malls, etc.

Some of these chains after setting up in the metros are already looking to foray in to the non-
metros to reach out to a broader customer base.

Forecasted New Retail Space Distribution by 2010

NCR NCR
Others 22% Mumbai
35%
Pune
Mumbai
Hyderabad
15%
Bangalore
Kolkata
Pune Chennai
8%
4% Kolkata
Chennai Hyderabad
Bangalore Others
4% 7%
5%

 
Source: Knight Frank Research

Distribution of current retail spacein NCR

Noida
5%
Ghaziabad Gurgaon Noida
26% 26% Gurgaon
Greater Noida
Faridabad Delhi
4% Faridabad
Delhi Greater Noida Ghaziabad
22% 17%

Source: Knight Frank Research

2.4 GROWTH DRIVERS OF REAL ESTATE

Indian Real Estate Market Growth Drivers:

12
 

Source: www.bnicapital.com/GrowthDrivers

• The robust growth in IT sector has pumped the growth in real estate sector. An
estimation of 70 percent of new construction is for the IT sector.
• Retail sector is growing at a fast pace. India has been ranked as 5th in the list of 30
emerging retail market and 20 percent growth is predicted for the organized retail
segment by 2010.
• Spiraling demand for hotel rooms has bought boom in hotel industry. The demand
supply will remain over 50 percent beyond 2009 generating substantial business for real
estate. 

“The correlation between the stock market and the property market is
marginal enough to be insignificant. While the stock market is driven by
investors on a desire-to-earn basis, the property market is driven by the
end users on a need-to-use basis.”

2.5 MAJOR PLAYERS IN INDIA 

Real Estate Developers:

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DLF

UNITECH

ANSALS

PARSVNATH DEVELOPERS

OMAXE LTD.

ELDECO &

EROS

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CHAPTER 3

RESEARCH METHODOLOGY

Research methodology:

15
 

3.1 Primary Objectives:

1. Study the profit margins of Real Estate developers in different projects.

2. Study of competitors.
  (DLF, ANSALS, UNITECH, PARSVNATH, and OMAXE)
• Project details
• Market share
• Present and future developments plans.

3. Study the customer/investor perception about investing in Real Estate in NCR.

• Interest in investing in real estate.
•Reasons for investing in real estate. (Short term, Long term, End use, Recurring
Returns)
•Risk factor in real estate and Return.
•Project they like to invest their funds. (Office Spaces, Plots, Shopping Malls,
Multiplexes, Group housing)
•In which assets class they find themselves most comfortable. (Real Estates, Equities,
Debt and Commodities)
• Their need for specifications and factors they find appropriate where they are investing
their funds.
• Lack of facility in previous or current residence.

4. What are the risk and return factors in investing in real estate.

5. Why they invest in real estate and for what reason.

3.2 Hypothesis:

(1) H0: The customers do not have interest in investing in real estate.
  H1: The customers have interest in investing in real estate.

(2) H0: The developers are unsuccessful in solving the problems and providing necessary
specifications to customers.
  H1: The developers are successful in solving the problems and do not provide necessary
specifications to customers.

3.3 Research Design:

The study is to conduct on the part of business expansion plan of Dreamland promoters and
Consultants Pvt. Ltd. to expand their business and solve customer’s issues. On this part,
Market Survey is conducted to know the customer/investor perception about investing in
real estate.
In this research focus is on current customers views about real estate as an asset class.
The approach is direct. The survey is going to be done through a large sample of major 
customers/investors via questionnaire in NCR.
3.4 Sample Design:

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The sample size for the above study was a total of 200 from the whole NCR. The
respondents of a sample are selected using non-probability procedures. The target
respondents were HNI’s (High Network Individuals), upper segment of middle class, high
level executive workforce of corporations.

3.5 Scope of the study:

Among the study key findings are:

Customers have a short history of real estate investment but are currently
•

increasing their allocation to the real estate, more so than equities, debt and
commodities.

• Legal and regulatory risk, hard to determine the best opportunities and risk of 
poor professional advice are given as the main reason for real estate investing.

• Despite of developers investing their large part of funds on entertainment centers like
shopping malls, multiplexes etc. large part of customers prefer to invest in residential
projects such as plots and group housing.

• Residential property is gaining as an attractive mode of investment of middle class

 people leading to growing demand.

• The most important factors influencing the real estate asset allocation decision are
statistical estimates of risk and return, advice from external consultants and long term
historical performance.

• Despite of billion of money spent on brand advertising, customer’s rate brand-strength

as a weak influence at best on their purchase decisions.

• With the shifting of more and more companies and offices to the suburbs, growth in the
suburban residential real estate market has been witnessed. Lavish townships with good
quality construction replete with luxurious amenities and facilities are now coming up.
Survey reveals the factors or specification needed by the customers where they are
investing their funds and also the lack of facility in their previous or current
residence.

3.5 Limitations:

17
 

• Our respondents locate real estate much more than any other asset class such as
equities, debt and commodities. But they mention that the cost associated in investing
in real estate is much more than these classes.

• The potential relevance of uncertainty is immediate evidenced from many of the

questionnaire results. In many questions, we observe significant differences in the
“Don’t know” response.
• In one of our question in questionnaire we ask the factors you find appropriate for risk 
in real estate. i.e. asset volatility, lack of reliable valuation data, legal and regularity
risk, risk of poor professional advice, hard to determine best opportunities.
  May be some of the factors are hard to determine and uncontrollable and
unavoided.

• The key fact is the ability to service the debt. The general thumb rule for debt serving is
to restrict all EMI payments to 45 percent of the investor’s disposable income. This
figure could vary according to the age of the person and his financial commitments. 25
years old unmarried person with no commitment can commit even to the extent of 75
 percent of his disposable income to servicing a home loan EMI. But a 40 years old
 person with a wife and a child may struggle to service an EMI of 55 percent of his
disposable income. The quantum of loan and structuring the EMIs has to carefully plan
 before hand to fall in debt trap.

• In reality asset allocation is far more sophisticated process. It varies from person to
 person and depends on person’s financial plan, background, disposable income, age,
and investor’s preferences.

• Consider middle-aged person from a middle class background seeking a stable life long
 job. He cannot be expected to invest in equities and property. His preference would be
 bank FDs. On the other hand, a market savvy young couple in the corporate sector with
high surplus would prefer to invest in property.

18
 

CHAPTER 4

CRITICAL REVIEW OF LITERATURE

Critical Review of Literature

19
 

A just released customer/investor research study, titled Customers/investors perception about

investing in real estate throws a light on institutional investors and customers face a complex
set of choices with respect to the composition and management of investment portfolios.
In this research we collected information about the real estate allocation choices, beliefs and
view points of customers/investors.

Our investigation of the asset allocation gives interesting results.

• Our respondents locate real estate much more than any other asset class such as
equities, debt and commodities. But they mention that the cost associated in investing
in real estate is much more than these classes.

• The potential relevance of uncertainty is immediate evidenced from many of the

questionnaire results. In many questions, we observe significant differences in the
“Don’t know” response.

• In one of our question in questionnaire we ask the factors you find appropriate for risk 
in real estate. i.e. asset volatility, lack of reliable valuation data, legal and regularity
risk, risk of poor professional advice, hard to determine best opportunities.
  May be some of the factors are hard to determine and uncontrollable and
unavoided.

• The key fact is the ability to service the debt. The general thumb rule for debt serving is
to restrict all EMI payments to 45 percent of the investor’s disposable income. This
figure could vary according to the age of the person and his financial commitments.

• In reality asset allocation is far more sophisticated process. It varies from person to
 person and depends on person’s financial plan, background, disposable income, age,
and investor’s preferences.

• Consider middle-aged person from a middle class background seeking a stable life long
 job. He cannot be expected to invest in equities and property. His preference would be
 bank FDs. On the other hand, a market savvy young couple in the corporate sector with
high surplus would prefer to invest in property. The age factor should be properly
defined before targeting.

Comparison of role of risk and uncertainty with US Market

• Diversification and inflation hedging are given as the main reasons for investing in real
estate in US market.
• The expected risk & return of real estate is perceived as midway between US stocks and
 bonds.

20
 

CHAPTER 5

REAL ESTATE INVESTMENT

5.1 Industry profile

21
 

India, like many other parts of the world is zooming away in the face of a real estate boom. In
India there is a real estate boom in any direction you wish to see. Whether it is Bangalore,
Pune, Calcutta or Chennai or Hyderabad or even already sky high Mumbai or Delhi – the
story is same.

 Now apartments are more than just houses. They are about lifestyle. So while the first
housing colonies had nothing but a security guard, these new housing colonies have a gym (spa,
Jacuzzi, steam), swimming pool (heated, lined with Italian marble) some have a multiplex,
shopping complex. There are those which offer a servant entrance. The next step is creating an
ambience. What does one differentiate in a house? So you now have themed houses.

The concern is that in India, the stock prices are at the height of a boom. As it happens, a boom
in one sector translates into a boom in another sector with invertors rushing to park their money
in a safe place. Also, add the foreign exchange glut in India fuelled to a great extent by software
engineers parking their dollar salaries in real estate (especially near the tech hubs ). Low
interest rates (relatively, as compared to 10 years back ) over the last few years made bank 
loans easier.

Driven by positive growth in the economy, real estate in India is booming. The year 2006
started as on a promising note when the Government of India opened the construction and
development sector in February 2006, and allowed 100 percent foreign direct investment
(FDI) under the ‘automatic route’ in order to spur investment in the vital infrastructure
sector. The government has thrown open the lucrative parts of the Indian reality market to
global investors for the first time.

The relaxation of the FDI ceiling saw big names joining hands with the Delhi based
developments to announce India’s largest FDI in the reality sector. Groups showing interest in
India include major Indian and International Companies.

With property boom spreading in all directions, real estate in India is touching new heights.
However, the growth also depends on the policies adopted by the government to facilitate
investments mainly in the economic and industrial sector. The new stand adopted by Indian
government regarding foreign direct investment (FDI) policies has encouraged an increasing
number of countries to invest in Indian Properties.

India has displaced US as the second-most favored destination for FDI in the world. As the
investment scenario in India changes, India which has attracted more than three times foreign
investment at US$ 7.96 billion during the first half of 2005-06 fiscal, as against US$ 2.38
 billion during the corresponding period of 2004-05, making India amongst the "dominant host
countries" for FDI in Asia and the Pacific (APAC).

The positive outlook of Indian government is the key factor behind the sudden rise of the Indian
Real Estate sector - the second largest employer after agriculture in India. This budding sector 
is today witnessing development in all area such as - residential, retail and commercial in
metros of India such as Mumbai, Delhi & NCR, Kolkata and Chennai. Easier access to bank 
loans and higher earnings are some of the pivotal reasons behind the sudden jump in Indian real
estate.

Why Invest In Indian Real Estate?

Flying high on the wings of booming real estate, property in India has become a dream for 

22
 

every potential investor looking forward to dig profits. All are eyeing Indian property market
for a wide variety of reasons:

• It’s ever growing economy which is on a continuous rise with 8.1 percent increase
witnessed in the last financial year. The boom in economy increases purchasing power 
of its people and creates demand for real estate sector.
• India is going to produce an estimated 2 million new graduates from various Indian
universities during this year, creating demand for 100 million square feet of office and
industrial space.
• Presence of a large number of Fortune 500 and other reputed companies will attract
more companies to initiate their operational bases in India thus creating more demand
for corporate space.
• Real estate investments in India yield huge dividends. 70 percent of foreign investors in
India are making profits and another 12 percent are breaking even.
• Apart from IT, ITES and Business Process Outsourcing (BPO) India has shown its
expertise in sectors like auto-components, chemicals, apparels, pharmaceuticals and
 jewellery, where it can match the best in the world. These positive attributes of India is
definitely going to attract more foreign investors in the near future.

The relaxed FDI rules implemented by India last year has invited more foreign investors and
real estate in India is seemingly the most lucrative ground at present. The revised investor 
friendly policies allowed foreigners to own property, and dropped the minimum size for 
housing estates built with foreign capital to 25 acres (10 hectares) from 100 acres (40 hectares).
With this sudden change in investment policies, the overseas firms can now put up commercial
 buildings as long as the projects surpass 50,000 square meters (538,200 square feet) of floor 
space.

Indian real estate sector is on boom and this is the right time to invest in property in India to
reap the highest rewards.

5.2 Company profile

23
 

In a Short span of time, ‘Dreamland Promoters & Consultants’ has established its reputation as
the rising star of Indian star of Indian real estate industry. The extraordinary achievements of 
the company are unparalleled and have quickly translated into truth and faith of its customers
and associates. Dreamland Promoters and Consultants Pvt. Ltd., is an upcoming name in the
field of housing development.

Promoted by the young and visionary, Mr. Pawan Bhadana, Dreamland, an ISO 9001:2000
company is bound together with energies of youth and wisdom of experience. A thorough real
estate professional with an experience spanning over 10 years, Mr. Bhadana himself is a man of 
ideologies. Under his dynamic leadership, Dreamland has achieved milestones that were
hitherto. However, foe him success has come not just in the form of business volumes, but as
love and appreciation of all concerned.

Dreamland understands that a home is not just by brick and mortar. Behind the construction of 
every home, lie the dreams and aspirations of a family. To match their expectations and to
really make their dreams come true, lot of care and a lot of commitment has to go right from
designing it the finishing part. And to supplement such wonderful home, a pleasant
environment also needs to be created. This is the reason that the company has associated with
itself the best architect, planners and construction professionals.

Vision:
To play an important part in the process of housing development in our 
nation by creating a reputed organization of globally appreciated
standards based on integrity, values and trust.
To contribute to the case of society by initiating and supporting
educational, cultural and health development activities particularly for 
underprivileged children

Mission:
To develop & deliver quality housing and to work towards achieving
excellence in our field
Apart from its present sphere of business, Dreamland has mega
 plans to diversity and excels in other fields, including: Media, IT,
Education, Hospitality.
To carry out its corporate social responsibilities, the
establishment of ‘Dreamland Foundation’ is on the cards. To start
with, the foundation will cater to the education needs of 
underprivileged children.

MD’s Message

24
 

Mr. Pawan Bhadana

M.D., Dreamland Promoters & Consultants Pvt. Ltd.

“We aim to create real value for our customers by adopting quality standards that match the
 best in the world. Encouraged by the trust of our valued clients as well as our partners, we
strive to establish benchmark in real estate development and turn many dreams into reality.”

FUTURE PROSPECTS:
Dreamland Group has embossed its name on the ground of Indian real estate sector. Headed by
the visionary, Mr. Pawan Bhadana, CMD and driven by a dedicated team of real estate
 professionals, Dreamland Group is committed to create exceptional projects that offer real
value to its customers.

Up surging with widely recognized and appreciated projects, the group already has to its credit
the grand success of Golf View City at Hapur (approved by the H.D.P.A.) and The Willows-
Lifestyle Apartments at Ghaziabad (approved by G.D.A.) that are currently under development.

With its upcoming residential project, Dynasty Apartments, Dreamland is all set to promote and
develop ‘Bhiwadi’, the latest destination for real estate development. Here, the group proposes
to develop a residential project consisting of apartments and plots. Dreamlands, Dynasty
Apartments will incorporate latest international technologies in construction and interiors.
Special attention is being given for the aged and handicapped and special facilities are being
 provisioned to make them feel comfortable.

Taking its commitment further, Dreamland has also proposed ambitious projects at Noida
(Residential Apartments), Greater Noida (Residential Apartments) & Faridabad (Commercial)
among others.

COMPANY PROJECTS
THE WILLOWS

25
 

Come Home to India’s First City

Enjoy a life wrapped in futuristic lifestyle, Luxury and Comfort. At the Country’s first Global
city, is the Crossing Republic. The one and only city in the country planned to bring a whole
new world within and arm’s distance not just for you and your family, but for your coming
generations as well as with world-class ambience, Meticulous Design, Premium Infrastructure
and Futuristic facilities within the premises.

Contemporary Design
The entire city is a perfect of Residential, Commercial and Recreational options where each
 buildings facade, Color and Heights in designed in sync with the architectural details of other 
 buildings.

Futuristic Facilities
Answering the needs of an organized and comprehensive lifestyle, Crossing Republic also
 plans kindergartens, Primary and Secondary Schools and even a College and a university within
the city. Intelligent planning to meet the Current and Future needs of the residents, Crossing
Republic offers world-class Commercial options from malls, Retails, Outlets, Small offices to
large corporate workspaces.

Stretching Water Bodies

Set next to the Hindon River, Crossing Republic is blessed with ample source of pure water.
Besides, Refreshing and cascading water within the premises will fill your life with refreshing
energy.

Recreational Wonders
A huge international-standard central park with lots of Water bodies, Play areas, Entertainment
zones will refresh one’s life with ideal balance of open spaces and landscaped greenery.

Strategic Location
Strategically located on the upcoming Delhi NCR Ring Road, Crossing Republic is directly
connected with three expressways, NH-24. (2010 Commonwealth Games main road, Eastern
Expressway and Noida-Greater Noida Expressway)

Convenient Approach
Close Proximity to two metro stations will connect this place with all the areas of NCR in the
near future. Sprawling over an area of 50 acres, crossings Republic is indeed an epitome of 
modern development and vision that offers a future-proof living.
GOLF VIEW CITY

26
 

GOLF VIEW CITY is not just a residential township, it is a whole new world that offers you a
unique lifestyle crafted for only a few who value fine taste.

Located in one of the most picturesque sites, Golf View City on the National Highway-24,
surrounded on three sides with densely lush green belt, the locality has a certain freshness of 
virgin countryside that can make any nature lover jump with joy!

Golf View City is all about world-class facilities and comfortable living. The planning is
immaculate. Golf View City is an address that announces your arrival in life….it transcends
you to a different world. The ultimate greens of your dreams that will up-grade the standards
you had set for yourself.

Golf View City brings you a perfect fusion of man and nature. It is a unique amalgamation of 
undulating greens, open spaces, interesting architecture and efficient facilities.

So pamper yourself and let your senses take over.

After getting overwhelming response from Dreamland heights of Dreamland Promoters &
Consultants Pvt. Ltd. in Crossing Republic, NH-24 (Ghaziabad), Dreamland is now bringing
a world class Township Golf View City at Hapur Bye Pass on NH-24.

Golf View City is strategically located on Hapur Bye Pass, yet tucked away from the heavy
traffic of the highway. Surrounded by 100 meters broad greenbelt, it has in store for you-peace
of mind, comfort and satisfaction.

Golf View City is complete in itself, spread over several acres of land. Its unique value
offerings that make Golf View City really exclusive, it offers the occupant with a
comprehensive modern city infrastructure comprising internal amenities centers and facilities of 
all kinds, the township brings with it unmatched life filled with an absolute charm of nature.

Golf View City certainly has the perfect offerings to transform your dream home into reality.

5.3 SWOT Analysis

27
 

STRENGTHS

• R & D with Dreamland have developed excellent R & D and building and developing
capabilities, which has build a strong customer base and establish market leadership
through the high quality of its units quality.
• The increasing demand for the real estates presents a great opportunity for The
Dreamland Promoters and Consultants Pvt. Ltd. to increase and scale up the production.

WEAKNESS

• Dreamland has low presence in commercial projects. It has no units of commercial

 projects.
• Dreamland is mainly focused on residential projects.
•  Not looking towards the scope of western UP where demand of residential projects is
increasing.
• Few Projects, thereby less coverage in the market.

OPPORTUNITIES

• There is a scope of business as there is a demand for real estates.

• The big IPO (initial public offering) is a big opportunity of the company.
• The concept of wedding mall.
- The theme based malls are the way to the future.

THREATS

• Dreamland has the biggest threat from the global and large players in the real estate like
DLF, UNITECH & OMAXE.

28
 

CHAPTER 6

STUDY OF COMPETITORS

THE COMPETITORS

• DLF

29
 

• UNITECH

• OMAXE.

• ANSALS

• ELDECO

• EROS

• PARSVNATH DEVELOPERS

DLF

30
 

DLF presently has its land bank in 31 different cities, through with a small presence (less than
100 acres) in 20 of these. In addition to 574 mn Sq. ft. land bank, DLF has 23 super luxury
hotel sites, a golf course and clubs.

7 NCR(Approx95%in
2 gurgaon)
3 Kolkata
4
Goa
4
Chandigarh
5
52 Pune

Indore

Bangalore

23 Others

Too large dependence on Gurgaon:

The total land bank of 10,225 acres is highly skewed in favors of Gurgaon and to some extent
Kolkata too. DLF has approximately 72 percent of its total land bank in Gurgaon (46 percent)
and in Kolkata (23 percent) together.

Land cost and current debt levels

DLF has a total debt of Rs. 94.5bn and an outstanding amount of Rs. 55.4bn towards land Rs.
94.5bn and cost. Of the total debt of Rs. 94.5bn, 75 percent is on a floating rate basis which is a
risk in a rising outstanding land interest rate environment. DLF had capitalized Rs. 1.1bn out of 
the total interest charge of cost is Rs. 2.8bn for FY06 and estimated the interest charge for 
FY10 would be Rs. 5.4bn, on a conservative basis, as interest rates have gone up by roughly
150 percent in the last nine months.

Significant debt and Landcost outstanding(Rsbn)

100
80
60
40
20
0
Debt Land cost Construction cost for Est.Interest
outstanding existing projects Payment FY07

A quick snapshot on area developed, under construction and planned

31
 

A total of 10,255 acres translates into 574mn. Sq. ft. of saleable area, the total 574mn sq. ft.
involves the development of plots of 46mn sq. ft., residential apartments of 377mn sq. ft. DLF
is of the opinion that its present land bank is sufficient for the next 10-11 years. Out of 574mn
sq. ft., DLF has a total of 46mn sq. ft. under development as of 30 November 2006, between
FY07-09 with 9m sq ft under residential; 26m sq ft under commercial and 11m sq ft under 
retail development.

Snapshot of DLF past and future developments plans

Development Completed In Progress Planned Plan for year

2008-09

Plots 195 - 46 -

Residential 17 9 375 69.8

Commercial 6 26 62 48.2

Retail 2 11 45 31.7

UNITECH

32
 

The Rs. 1600crores Unitech Group is one of the Major Township Planning and real estate
development companies in India and has a diverse business portfolio of heavy construction,
leisure and entertainment projects, hospitality business and residential property developments.

After playing second fiddle to DLF in Gurgaon, the low-profile Unitech Group is gradually
asserting itself in the real estate market of the national capital region. In May 2006, in an upset
of sorts, Unitech got the better of DLF by grabbing 345 acres of prime land in Noida for 
whopping Rs. 1582 crores. Unitech has a land bank of 10500 acres whose breakdown is shown
 below and its future plans are of 500m sq ft for the year 2008-09 for which they need huge
amount of funding.

2% 8% 8%
8% Noida/G. Noida
4
kochi
9% Gurgaon
11% Kolkata
Chennai

10% Varanasi
Agra
Hyderabad
18% Bangalore

22% Others

Unitech Builder plans to use the Noida land to make 4000 top-of-the-line apartments priced at
Rs. 2 crores (Rs. 20 million) each. The investment required to build this dream residential
 project: Rs. 3000 crores (Rs. 30 billion). Besides inking this mega deal, Unitech has been on a
land-buying spread across the country – from Gurgaon to Kolkata, Kochi, Hyderabad and
Chennai – to establish a pan-Indian presence. In the last few months, the Group has created a
land of over 8,000 acres.

PARSVNATH

33
 

Parsvnath developers announced that they would invest Rs. 1600 crores over the next three
years to construct a metro station cum shopping mall near the Commonwealth Games
Village in the National Capital. The metro station cum shopping mall is spread over 7.3 acres
and about 3.65lakh sq. ft. of retail space would be developed. This will be the 12th mall which
the Parsvnath will develop at metro stations, owned by Delhi Metro Railway Station
Corporation, a building operator transfer basis.

Parsvnath projects cover saleable area of 134 million sq. ft, including owned land development
rights; this does not include land owned in SEZ business. Ongoing projects are spread over 17
states and 46 cities.

Upcoming No. of  Saleable Land Development Total Total Cost

Projects Projects Area Cost & Cost in in US$
Construction Rupees
Cost

Residential 31 32.88 1344.9 3978.32 5323.3 1183

Commercial 21 4.91 795.68 800.12 1595.8 354.62

Integrated 21 86.06 1121.0 7405.8 8526.8 1894.8

Township

IT Park 4 6 4.55 915 919 204

120
DMCR 6 1.46 276.64 260 536

Hotels 17 2.69 247.31 627 875 200

Total 100 134 3790 14000 18000 4000

Projects under Development

34
 

IT Parks Hotels
5% 3%

Residential Integrated Township

22% Commercial
Residential
Integrated IT Parks
Commercial
Township Hotels
4%
66%

OMAXE

35
 

It started in 1987 as a vision, to realize the dreams of millions across the length
and breath of our country, is today an ISO 9001:2000, D&B 5A2 rated
organization that proudly boasts of over a 100 successfully completed projects
under its belt. At OMAXE we believe that our spectacular performance, extra-
ordinary growth and spotless track record over the past 19 years are proof of the
infinite possibilities that lie within us. It is the belief that puts OMAXE in the
forefront of this multi-billion industry as a pioneer with an unshakeable
reputation for delivering what is unconceivable for others. It also beckons us to
continue realizing the dreams of million into reality.

OMAXE, one of the India’s fastest growing Real Estate developers, has
registered its presence across the country with a healthy mix of projects that
range from well planned office spaces to international standards townships,
group housing, state of the art malls, commercial complexes, multiplexes, theme
malls, resorts, hotels, service apartments etc. The company has also diversified
into IT parks, bio-technology parks, SEZs etc.

Today, OMAXE enjoy a reputation of being one of the India’s premier Real
Estate Developers with an indelible focus on customer satisfaction. This feat has
 been achieved through the adoption of quality system standards that integrate
technological and design innovations with a strong technical base to provide
state of the art real estate options.

At OMAXE, the human mind and spirit continue to be our most precious
resource and a critical ingredient in the spectacular success of our endeavors.
Today OMAXE boasts of over 800 qualified men and women who are
successfully turning their dreams, and dreams of million into reality.

Having registered phenomenal start based on the successful acquisition and

implementation of a large number of highly challenging and hugely varied
 projects, all in a short span of under two decades, OMAXE today enjoys the
reputation of being North India’s fastest growing Real Estate Developer.

36
 

CHAPTER 7

DATA

7.1 Data Collection

As a preliminary for the business development of the company it was essential to find the
customer/investor perception about investing in real estate.

37
 

For collecting the information a questionnaire was designed focusing on the main cities in NCR 
like Greater Noida, Noida, New Delhi and Ghaziabad where the company is operating its
 projects.

The respondents in our sample size are professionals from major public and private institutions
which include managers, consultants, proprietors, business class etc. Approximately 200
questionnaires were filled and ultimately collected 169 with positive response that they have
their interest in investing their funds in real estate.

Table 1 summarizes the total sample size which reflects that majority of respondents have their 
interest in real estate.

Table: 1 Sample size and Respondents:

City Total Respondents Interested in Real

Estate

Greater Noida 50 42

Noida 50 44

Ghaziabad 50 40

New Delhi 50 43

Total 200 169

No. Of Respondents Interested in Real Estate

NewDelhi 25% Noida25%

Noida
Greater Noida
Ghaziabad
New Delhi
Ghaziabad24% Greater Noida
26%

7.2 Primary Data

The whole of the study is primary data based oriented through a questionnaire.The contents of 
the questionnaire are:

38
 

• Interest in investing in real estate.

• Reasons for investing in real estate. (Short term, Long term, End use, Recurring
Returns)
• Risk factor in real estate and Return.
• Project they like to invest their funds. (Office Spaces, Plots, Shopping Malls,
Multiplexes, Group housing)
• In which assets class they find themselves most comfortable. (Real Estates, Equities,
Debt and Commodities)
• Their need for specifications and factors they find appropriate where they are investing
their funds.
• Lack of facility in previous or current residence.

The questionnaire is attached in annexure.

39
 

CHAPTER 8

FINDINGS AND ANALYSIS

Findings and Analysis

40
 

The company, Dreamland Promoters and Consultants Pvt. Ltd. has presently 3
 projects out of which 2 have been already cleared and one is yet to be executed.
The developers expect 30-40% returns/profit margins, although it varies from
 projects to projects due to various reasons like time, cost of purchase, etc.

8.1

Question 1 among the questionnaire reflects the real estate investment policy specifically. We
asked our respondents do you have interest in investing your funds in real estate.

The answer to the question 1 indicate that a surprising number of respondents, nearly 169 out of 
200 have their interest in investing their funds in real estate.

Exhibit 1: Question 1

Do you have interest in investing in Real Estate!

No. of Respondents
NotInterested16%

Interested84%

Interpretation:

Certain increase in property prices in the last four years, high income, cheaper loan rates, no
longer adverse to debt and ready to discount future earnings today could be the main reasons
for development of interest in real estate of customers.

8.2

Reasons for the customers/investors for investing in real estate, may it be Short term returns,
Long term returns, End use or recurring returns. Different respondents from different cities

41
 

show different perceptions. End use and long term investment are the two reasons among four 
who votes majority of respondents.

Exhibit 2: Question 2

Reasons for investing in Real Estate!

Reasons for Investing

60

50

40 Short Term
Long Term
30
End Use
20 Recurring Earning

10

Interpretation:

Since real estate has beaten all forms of investment in last four years and sought to be emerging
as a key element in customers/investors portfolio and by paying an EMI instead of paying taxes
and rent they develop a compulsory saving habit and create a valuable asset for a long period of 
time could be a possible reason for this above result.

8.3

The question mentioned states about the top risk factors associated with the real estate
investing. Asset volatility, lack of reliable valuation data, legal and regularity risk, risk of poor 

42
 

 professional advice, hard to determine the best opportunities are the various risks associated
with real estate and mentioned in questionnaire.

Exhibit 3: Question 3

Top risk factors in Real Estate!

Asset Volatility
Top Risk Factors

40 Lack of reliable
35 data
30
Legal and
25 Regularoty risk 
20
Risk of poor
15 professional
10 advice
Hard to
5
determine best
0 oppurtunities

Interpretation:

Risk of poor profession advice, legal and regularity risk, hard determining the best
opportunities are the top three factors. Change in government policies, change in trend and
fashion cold be the main reason for above.

8.4

Various big players had registered its presence across the country with a healthy mix of 
 projects. The question revolves around the same perception about customers/investors view in

43
 

which project they would like to invest. – Office Spaces, Shopping Malls, Plots, multiplexes &
Group Housing are few of the projects.

Exhibit 4: Question 4

Project in which customers/investors like to invest!

Projects of Interest

50

40
Office Spaces
30 Shopping Malls
Plots
20 Multiplexes
Group Housing
10

Interpretation:

There’s been an evident shift in perception and mindset in the Indian middle class over the last
five to ten years, thanks to the impact of liberalization and opening up of the Indian economy, a
rise in average income across households, and a palpable desire to own things ‘now’. The most
crucial aspect of this ‘shift’ in the consumer’s mindset is perhaps explained by the fact that the
young (or Next Generation) are more in charge of their lives and eager and impatient to assume
the world. It’s a generation that is independent, self-reliant and nuclear in nature. And it is this
eagerness that is succeeding that has fuelled a drive to own what one desires the most: a home,
a car and a healthy lifestyle. Other drivers have been incentives from the government to buy
homes, improved quality of buildings and property services and a bouquet of financial options.
Tax concessions, property price dips and lower interest rates have also helped.

8.5

The question ask “on a 5-point scale,….how does the long term expected return for the real
estate component and your portfolio compare with the long term expected return for the
following asset class in your portfolio”?

44
 

In which of the following asset classes are you most comfortable in investing your funds.

The research report that most respondents believe real estate has an expected return a little
above that for equities and debt. They expect commodities too significantly and somewhat less.

What factors might explain this apparent contradict?

• First, allocation might not be based on modern portfolios theory.

• Second additional factors affecting risk and return estimates-such as higher relative cost
of real estate.
• Consistent with this notion is the real estate has done well relative to stocks and bonds
recently, a number of customers reported investing in real estate only recently.

8.6 & 8.7

The question asks about the factors or specifications to be included by developer where the
customers/investors are investing their funds.

The factors listed below are most demanding among all:

• Affordable price range.

• Availability of loan at low interest rates.
• Easy payment plan.
• Clear title of property.
• Resale value.
• Connectivity to schools, hospitals, entertainment centers.
• Peaceful locality
• Pollution free environment.
• Quality construction and maintenance.
• Safety and Security, Water Availability, Power Back-Up, Car Parking, Recreational
Facility, Club Membership etc.
• ROI (Return on Investment)

Thus, we found that respondents are interested in investing in real estate and at the same time
developers are successful in satisfying the real estate investors. Each developer has an average
of 30-40% profit margins, although it varies from projects to projects because of factors like
cost of purchase, time, etc.

45
 

CHAPTER 9

RECOMMENDATIONS

Recommendations:

• In reality asset allocation is far more sophisticated process. It varies from person to
 person and depends on person’s financial plan, family background, disposal income,
age, and investor’s preferences. So before targeting the customers the company should
consider the factor.

46
 

• Consider middle- aged person from a middle class background seeking a stable life long
 job. He cannot be expected to invest in equities and property. His preference would be
 bank FDs. On the other hand, a market savvy young couple in the corporate sector with
high cash surplus would prefer to invest in property. The age factor should be properly
defined before targeting.

• Company should state to its customers that since real estate has beaten all forms of 
investment in last 4 years and sought to be emerging as a key element in customer’s
 portfolio and by paying an EMI instead of paying taxes and rent, they develop a
compulsory saving habit and create a valuable asset for a long period of time.

• Tremendous demand for residential property such as group housing, residential plots,
and townships rather than commercial property. The company should focus on
developing the residential property more rather than commercial property.

• There should be an option for discount for customers from registered dealers of the
company.

• Customers should be approached and asked them to see sample flat without forcing
them to buy the flat. The conveniences should be born by the company.

47
 

CHAPTER 10

BIBLIOGRAPHY & REFERENCES

BIBLIOGRAPHY:

• http://www.dreamlandindia.com

• http://www.ssrn.com

48
 

• http://www.unitechgroup.com

• http://www.omaxe.com

• http://www.dlf.in

• http://www.parsvnath.com

49
 

CHAPTER 11

ANNEXURE

Questionnaire

What are the customer’s and investors perceptions about investing in Real Estate!

Introduction

Thank you for taking the time to complete the survey. Your feedback is integral to our 
academic research how customers think about investing in real estate. Specifically we want to

50
 

uncover why the real estate is such a limited part of most of the customers and organization
 portfolios.

Your answer will remain strictly confidential and will be used for research purpose only. The
survey should take about 5-7 minutes to complete. Thank you once again for your time.

NAME: AGE:

ADDRESS: OCCUPATION:

1. Do you have interest in investing your funds in Real Estate?

[ ] Yes [ ] No

If yes, please answer the following questions.

2. Have you ever invested your funds in Real Estate?

[ ] Yes [ ] No

3. Reasons for investing in Real Estate?

[ ] Short Term Return [ ] Long Term Return

[ ] End Use [ ] Recurring Return

[ ] we do not invest in Real Estate

4. Top risk factors in real estate and return?

[ ] Asset volatility [ ] Lack of reliable valuation data

[ ] Legal and Regularity risk [ ] Risk of poor Profession advice

[ ] Hard to determine the best opportunities [ ] any other 

5. Various big players had registered its presence across the country with a healthy mix of 
 projects. In which project you would like to invest your funds.

[ ] Office Spaces [ ] Shopping Malls

[ ] Plots [ ] Multiplexes

[ ] Group Housing [ ] Any Other, Please specify_________ 

51
 

6. For which of the following assets classes are you most comfortable in investing your funds.
Least Comfortable Most Comfortable
1 2 3 4 5
Don’t Know _ _ _ _ _ 

Real Estate _ _ _ _ _ 

Equities _ _ _ _ _ 

Commodities _ _ _ _ _ 

Debt Markets _ _ _ _ _ 

7. Almost every builder providers the following specifications in his project like:

• Affordable Price Range, Availability of loan at low interest rates, Easy Payment Plan.
• Connectivity to Public Transport, Work Place.
• Proximity to Schools, Hospitals, Entertainment Centers.
• Clear title of property, Resale value.
• Peaceful locality, Pollution free environment.
• Quality Construction, Maintenance, Safety & Security, Water Availability, Power 
Back-Up, Car parking facility, Recreational facility, Club Membership etc.
• Return on Investment (ROI)

Any other factor or specification you find appropriate or useful in the area you are investing,
 please specify______________________________________________ 

8. Brand Name is something that immediately comes into your mind. Please rate the developers
according to brand image.

 _ DLF _ UNITECH _ OMAXE _ ANSALS _ ELDECO

 _ DREAMLAND _ EROS _ PARSVNATH

9. Please specify lack of facility in your previous or current residence.

 ____________________________________________________________________________ 
 __________________________________________________________________________ 

52
 

CHAPTER 12

CASE STUDY

CASE STUDY

Investing in Real Estate

INTRODUCTION

53
 

Investing in real estate presents both unique problems and opportunities. Real estate is a non-
liquid, localized investment vehicle. It is immobile, of limited supply, indestructible, and
 physically real. It is difficult to own buildings-they require maintenance, tenants, regular 
updating, and are subject to fire, hurricane, and location advantages/disadvantages.

Real Estate Investing has created more millionaires than any other investment vehicle in this
country. Investing in real estate is one of the safest and smartest investments that you can make.
Real estate appreciates at a rate far greater than the rate of the inflation, builds equity, provides
a steady return on investment, provides cash flow, and can offer substantial tax benefits.

Real estate is almost completely dependent on local conditions. One should invest in real estate
only if he or she knows the local situation well-including the local economy, market conditions,
 political environment, building controls, etc. All of these factors can be critical to the success or 
failure of an investment.

There are two types of properties that can be invested in are: residential and commercial.

• Commercial properties, as their name suggests, are properties that are sold or leased to
 businesses. These can include retail areas, warehouse spaces, industrial properties,
restaurants, and much more.

• Residential properties are homes, duplexes, condos, townhouses, and rental properties
rented or sold to individuals and families.

The Investors can invest in both types of properties! This is because a new real estate investor 
may spread himself or herself a bit too thin by trying to attract both businesses and tenants or 
families to both residential and commercial properties. Plus,residential real estate investing is
very different from commercial real estate investing. Different skills, networking procedures,
and even marketing are required for each.

It may be simpler to focus on one type of buyer or renter and one type of property, at least at
first.

For a beginning real estate investor, residential real estate investing makes a great deal of sense.
There are many advantages for the beginner investor, and even seasoned investor, interested in
residential real estate investing. One major advantage is that there is already an extensive
financing industry in place for residential properties. In fact, anyone can get funding in order to
 buy a residential property. There are even government programs and special programs in place
to help those with little money buy their first home.

Residential real estate investing can also be very attractive because there's always a target
market interested in this type of property. When the economy takes a downturn, businesses may
tighten their belts first. However, families and individuals will still need places to live. They
will still be renting, and even buying properties. The fact that there are government initiatives
and many types of mortgage programs ensures that home buyers continue buying even when
the economy is in a slump. This can make residential real estate investing slightly less risky for 
real estate investors.

There is simply always a market, something that cannot always be said for commercial property
investing.

54
 

Another major advantage of residential real estate investing is that it takes far less money to get
started. While commercial properties tend to be more expensive, residential homes can be
 purchased for very little. Distressed properties and foreclosed properties, in particular, can often
 be purchased for less than their actual market value. This makes getting started in residential
real estate investing relatively simple. An investor can simply purchase a property that is being
sold for less than its value. He or she can use traditional mortgages or business loans in order to
make the purchase.

After some renovating or even just cleaning up, the investor can then resell the property for 
considerably more and therefore make a profit. It is really that simple.

There are many advantages to residential real estate investing. For those new to the real estate
investing game or even for seasoned investors wishing to expand a portfolio with some more
solid investments, residential properties are great investment opportunity.

Real estate investing is a business where the realtors will be investing in his business for a
 period. These investors buy the property under a bond and sell this to other dealer who holds up
the property for a certain period and again he sells them to the buyer i.e. the owner. In real
estate investing, contract based transaction is also involved. While investing or dealing the
 property, the realtor can hold the property for a fixed period to complete the contract. After a
 period when the realtor sells the property, they get a huge amount of profit.

Real Estate Investors Benefits

In my opinion, even with the many opportunities out there today, becoming a real estate
investor is still one of the smartest choices for many would-be entrepreneurs, and here's why.
Unlike other choices:

Becoming a real estate investor actually carry less risk.

The truth is everyone needs real estate sooner or later. Businesses need retail space in order to
house their shops or store their supplies, and families need homes in which to live.

This constant demand ensures that the smart real estate investor always has willing audiences
looking for his or her product. This is simply not true of people who sell information products
or who work at home at other careers.

The earning potential for real estate investors are sky-high.  

Because real estate investors are selling very high tag items -- homes sell for anywhere from
tens of thousands to millions of dollars -- the profit margins can be terrific.

At the same time, start up costs for the real estate investors are not prohibitive. If you want to
own your own chain of restaurants, you may need to invest hundreds of thousands of dollars or 
go deep into debt in order to purchase the space, supplies, and in order to hire the staff. You can
realistically become a real estate investor while still at college and living in a dorm room.

55
 

You do not have to have specialized knowledge, tons of ready cash, or much of anything else
except knowledge and focused determination. The truth is, there are already a number of 
mortgage products, loan products, and other financial resources in place to help the would-be
real estate investor get started. After the first real estate deal or two, the real estate investor 
generally has enough money of his or her own to start investing in more properties.

Therefore, the real estate investor does not have to stay in debt and therefore face the risk of 
losing money in a bad economy.

Becoming a real estate investor can be deeply satisfying.

A real estate investor helps families find an ideal home, helps people with bad credit find a
 property that they thought they could not afford, and helps businesses established a base of 
operations. It can be truly rewarding for the real estate investor to make such a deep impact on
 people's lives. At the same time, the real estate investor enjoys complete freedom. He or she
does not have to report to a boss, spend hours in a cubicle, or even spend hours at home.

"This sort of freedom - combined with the truly awesome earnings potential of being an
investor - makes real estate investing a wonderful part time business opportunity."

If you want to earn a real living while enjoying greater freedom, consider all your options.
Once you do, you may find that becoming a real estate investor makes the most sense. This is
the opportunity that allows you to survive in just about every economy and allows you to enjoy
a truly rewarding career and truly terrific profits.

Real Estate Investors Losses

He can make plenty of costly mistakes, and real estate investing can be considered as a high
stakes, high risk game. The end result to failure could cost them much more than their pride.

Why invest in real estate ? Does it provide as much as could be expected from other types of 
investments, such as the stock market or mutual funds? If so, is the return high enough to be
worth the extra risk involved and the fact that the money may be tied up for an extended period
of time? What are the local market conditions, and how are they likely to change over the
course of two, five or ten years? It is certainly easier, and in many ways safer, to rely instead on
other types of investments. For instance, investing in mutual funds require little work, is easy to
understand, and historically has provided a very reasonable return.

There is one primary reason for investing in real estate - in a word, profit! Owning real estate
can often lead to returns that are double than those of more conservative strategies. This is
 based on the fact that in real estate there are three ways to make a return on the initial
investment. These three types of Return on Investment (ROI) can add up to a significant total
return – one that justifies the greater risk and involvement.

Three types of return on investment (ROI) are found with real estate. They are Cash Flow,
Return on Taxes, and Appreciation.

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First: Before tax Cash Flow

Cash Flow is the amount returned to the investor annually as cash. It represents the most direct
type of return, since it is money one can “put in his pocket” right away and as a result is most
desirable.

However, the amount returned as cash may not be that significant, and by itself would not
 justify the investment. Cash Flow typically will be lowest in the early years of a projects, and
may initially even be negative, meaning additional cash will need to be put into the project over 
the short term. Cash Flow hopefully will stabilize after a number of years, but often still will be
the least of the three ROIs.

Second: Return on Taxes

Many investors, especially those in higher tax brackets, are less concerned with cash return than
they are with the tax advantages of real estate investment. For them, real estate provides some
of the best tax opportunities available.

Third: Appreciation

The greatest Return on Investment is typically from appreciation, which is the continuing
increase in the value of a property due t higher market values each year. Properties can have
significant increases in value over time due simply to such market forces. The assumption of 
 property appreciation may initially seem contradictory, for tax law assumes a decrease in the
value of property over time. But such depreciation is a theoretical assumption, while true
market instead shows increases over time.

The relative high ROI due to appreciation represents one of the primary reasons for investing in
real estate. However, this return is realized only on the sale of the property, and is dependent on
an investor being able to tie up his or her money for an extended period of time. Real estate
investing is not for those who need a regular, predictable return on their investment. But it can
 be very rewarding for those who can invest relatively large amounts and wait for favorable
market conditions.

Important Factors in Decision to Invest in Real Estate

1. Location
2. Price – higher and better use, will market allow for better cash inflow
3. Demand - what is the competition among buyers?
4. Existing leases – are they good or bad
5. Existing operating expenses
6. Competition – what are new properties coming on market, will they improve our property
and make it more valuable
7. Condition – look for cosmetic problem not structural
8. Replacement cost

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9. Terms of financing
10. Economic cycle – is the timing good or is there a down-swing
11. Motives of seller – why are they selling (ask them)

KEY ISSUES OF THE CASE

• Why invest in real estate.

• What factors are to be taken into consideration before investing in real estate?

• It is completely dependent on local conditions of the economy.

• The primary reason for investing in real estate is in a word - “profit”

• There are two types of real estate properties i.e. Residential and Commercial. It is
difficult to own property.

• Three types of ROI are found in real estate.

• Doing a real estate business is really profitable.

• Real Estate Developers act as a guide and play an important role in the real estate
market.

ANALYSIS AND RESULTS OF THE CASE

Dreamland Promoters and Consultants Pvt. Ltd., a real estate developer, presently dealing in
residential properties enjoy a number of advantages over other companies. Residential projects
have a large market and even when the economy is downturn, people need place to live. As a
result, they are less risky and have a high tag earning potentials as compared to commercial
 projects. It also requires less capital for investment than commercial projects and if you want to
resell, you can easily get customers in a short span of time and make a profit.

CONCLUSIONS

Being a new to the market ‘The Dreamland Promoters and Consultants Pvt. Ltd.’ has a good
start, as is has tried to engage itself towards residential projects which have a competitive
advantages over the commercial projects.

Since, Real Estate Market is on a boom, it’s a great opportunities for real estate developers to
develop its market share and increase its profit margins.

QUESTIONS

Question: There are several properties to choose from in your area. How do you select the right
one? You need an effective way to evaluate and compare investment financials! Explain.

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Question: Why invest in real estate? Is the return worth enough taking the extra risk? If yes, for 
what period? What is your outlook for the real estate market?

Question: How are you reading the macro situation of the economy at present, as a Real Estate
Investor? What is your advice for all those new entrants eyeing the real estate space/market?

Question: Since ‘The Dreamland Promoters and Consultants Pvt. Ltd.’ has a small coverage
 but a good start, how should it go on increasing its market share both volume and value wise in
this competitive real estate market.

REFERENCES:

1. www.realestateweblog.org/maximize-investment-real-estate-software.php

2. www.reit.com

3. www.indianground.com/real_estate_india.aspx

4. www.economywatch.com/investment/real-estate-investment.html

5. www.real-estate-investment-information.com

6. www.vccircle.com/2008/07/07/forget-short-medium-term-problems-real-
estate-is-best-play-out-here

7. www.greatrealestateinvestinginfo.com

8. www.real-estate-investing
information.net/articles/tips_to_successful_real_estate_investing.php

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