Buying in a group is a simple concept wherein multiple investors can pool their funds for better bargaining power.
Why Group Buy Real Estate Investment?
- Affordable Entry: It can get you access to prime properties with a smaller ticket size.
- Collective Bargaining: Pooling capital gives negotiating power against large investors. For eg. 1 acre of land might cost you 1 crore but forming a group to buy 50 acre(s) can bring down the cost considerably to 70 – 75 lakh.
- Shared Growth: Investors can benefit from rising property values and rental yields together.
- Diversification: Investors can invest in multiple properties and hence spread the risk by co-owning larger, more lucrative real estate projects. Risk is distributed among investors, reducing individual exposure to market fluctuations or property-specific issues.
- Passive Income: Many group investments are managed by professionals, allowing investors to earn returns without handling day-to-day property management.
- Tax Benefits: Real estate investments often offer tax advantages, like depreciation deductions, which can be passed on to investors.