Customer Perception About REAL ESTATE as an Investment Option

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Customer perception about REAL ESTATE as

an investment option

A Project Report Submitted

To

G.G.N.I.M.T

For the Partial fulfillment of the degree (MBA)

Submitted By:

PARMINDER SINGH

(University Roll No.)

80104317039

DEPARTMENT OF BUSINESS ADMINISTRATION

G.G.N.INSTITUTE OF MANAGEMENT & TECHNOLOGY,

LUDHIANA


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ABSTRACT

The Study is done on the Customer perception about REAL ESTATE as an

investment option with the objective to find out what the customer prefer

about real estate. And to check the satisfaction level of customers to invest

in REAL ESTATE. The scope of the study was timed in Ludhiana city only. In

the study an attempt was made to cover every aspect of these objectives are

find out for the real estate business.

-------------------------------------- --------------------------------

Signature of the Major Advisor Signature of the Student


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INTRODUCTION

TO

REALESTATE


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Real estateReal estate is a legal term that encompasses land along withimprovements to the land, such as buildings, fences, wells and other siteimprovements that are fixed in locationimmovable. Real estate law isthe body of regulations and legal codes which pertain to such mattersunder a particularjurisdiction and include things such as commercialand residential real property transactions. Real estate is often consideredsynonymous withreal property(sometimes called realty), in contrastwith personal property (sometimes called chattelorpersonally under

chattel law orpersonal property law).

However, in some situations the term "real estate" refers to the land andfixtures together, as distinguished from "real property," referring toownership of land and appurtenances, including anything of a permanentnature such as structures, trees, minerals, and the interest, benefits, andinherent rights thereof. Real property is typically considered to beImmovable property

[2]The terms real estate and real property are used

primarily in common law, while civil law jurisdictions refer instead toimmovable property.
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Real estate terminology andpractice outside the UnitedStates (around the world)

Real estate as "real property" in the U.K.

In British usage, real property, often shortened to just property,generally refers to land and fixtures, while the term real estate is used

mostly in the context ofprobate law, and means all interests in land heldby a deceased person at death, excluding interests in money arising

under a trust for sale of or charged on land.[5]

Mexico and Central America

The real estate business in Mexico and Central America is different fromthe way that it is conducted in the United States.

Some similarities include a variety of legal formalities (withprofessionals such as real estate agents generally employed to assist thebuyer); taxes need to be paid (but typically less than those in U.S.); legalpaperwork will ensure title; and a neutral party such as a title companywill handle documentation and monies in order to make the smoothexchange between the parties. Increasingly, U.S. title companies aredoing work for U.S. buyers in Mexico and Central America.

Prices are often much cheaper than most areas of the U.S., but in manylocations, prices of houses and lots are as expensive as the U.S., one

example being Mexico City. U.S. banks have begun to give home loansfor properties in Mexico, but, so far, not for other Latin Americancountries.

One important difference from the United States is that each country hasrules regarding where foreigners can buy. For example, in Mexico,
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foreigners cannot buy land or homes within 50 km of the coast or100 km from a border unless they hold title in a Mexican Corporation ora Fideicomiso (a Mexican trust). In Honduras, however, they may buybeach front property directly in their name. There are different rules

regarding certain types of property: ejidal landcommunally held farmpropertycan only be sold after a lengthy entitlement process, but thatdoes not prevent them from being offered for sale.

In Costa Rica, real estate agents do not need a license to operate, but thetransfer of property requires a lawyer.

IndiaIndia is currently in the process of formulating definitive legislation forthe introduction and smooth functioning of REITs in the Indian realestate market. Once introduced these Indian REITs (countryspecific/generic version I-REITs) will help individual investors enjoythe benefits of owning an interest in the securitised real estate market.The best benefit being that of fast and easy liquidation of investments inthe real estate market unlike the traditional way of disposing real estate.The government and Securities and Exchange Board of India SEBIthrough various notifications is in the process of easing the norms ofinvesting in real estate in India directly and indirectly through foreigndirect investment, through listed real estate companies, mutual funds etc.With the current real estate boom and the market being flooded withInitial Public Offerof various listed real estate companies in India it willbe the best time for investors to own a share of the profiting marketeconomy. Legislative framework, revised investment norms, a

favourable investment opportunity, and a clear taxation policy willprovide the right kind of investing opportunity in India in the time tocome.

India has been witnessing a Real Estate boom in last few years.Primarily powered by the growth in information technology industry, the
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boom had taken property rates to the sky. Politician-Builder-Bankerlobbies have been the primary beneficiaries of the boom.

The global economic slowdown and higher interest rates seem to have

busted this real estate bubble. Property rates have started declining.Though they are still higher than reasonable, it was expected that therates were came down heavily in coming months, ie, after the end of2008. October used to be the month with highest number of bookings intheresidential propertybusiness, due to Dussera and Diwali. Contraryto builders' expectations, the bookings have been very few in the firsthalf of October, which indicates the heavy reduction in demand. Buyershave become more rational in the valuation of real estate property and

are no more ready to pay the exorbitant amounts demanded by builders.The Indian real estate sector plays a significant role in the country'seconomy. The real estate sector is second only to agriculture in terms ofemployment generation and contributes heavily towards the grossdomestic product (GDP). Almost five per cent of the country's GDP iscontributed to by the housing sector. In the next five years, thiscontribution to the GDP is expected to rise to 6 per cent.

According to Jones Lang LaSalle, faster economic growth in Brazil,Russia, India and China (BRIC) could result in the property markets ofthose nations recovering at a faster rate than the UK and US real estatemarkets. It has also been suggested that India's property sector couldbegin to improve from late 2009 and may attract up to US$ 12.11 billionin real estate investment over a five-year period.

Almost 80 per cent of real estate developed in India is residential space,the rest comprises of offices, shopping malls, hotels and hospitals.

According to the Tenth Five Year Plan, there is a shortage of 22.4million dwelling units. Thus, over the next 10 to 15 years, 80 to 90million housing dwelling units will have to be constructed with amajority of them catering to middle- and lower-income groups.
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Moreover, India leads the pack of top real estate investment markets inAsia for 2010, according to a study by PricewaterhouseCoopers (PwC)and Urban Land Institute, a global non-profit education and researchinstitute.

The report, which provides an outlook on Asia-Pacific real estateinvestment and development trends, points out that India, particularlyMumbai and Delhi, are good destinations. Residential properties areviewed as more promising than other sectors and Mumbai, Delhi andBangalore top the pack in the hotel buy' prospects as well.

The study is based on the opinions of over 270 international real estateprofessionals, including investors, developers, property companyrepresentatives, lenders, brokers and consultants.

Apart from the huge demand, India also scores on the construction front.A McKinsey report reveals that the average profit from construction inIndia is 18 per cent, which is double the profitability for a constructionproject undertaken in the US.

The real estate sector is also likely to get a boost from Real Estate

Mutual Funds (REMFs) and Real Estate Investment Trusts (REITs). Infact, according to a CRISIL paper, the REITs would have the potentialto hold at least 5 per cent share of the total global real estate market by2010, the size of which would reach US$ 1,400 billion in the next threeyears. The paper titled, Indian REITs; Are We Prepared', says that by

2010, REITs alone would hold a market size of US$ 70 billion of thetotal real estate market as its concept is gaining ground in countries likeIndia and other developing nations.

According to the Federation of Indian Chambers of Commerce andIndustry (FICCI), the Indian real estate sector is likely to experienceconsolidation wherein bigger players may opt for outright buy of smallerfirms or forge joint ventures or business alliances with them.


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Foreign direct investment (FDI) into India in the real estate sector for thefiscal year 2008-09 has been US$ 12.62 billion approximately,according to the latest data given by the Department of Policy andPromotion (DIPP).

Moreover, buoyed by positive market sentiment and demand revival inhousing, four real estate companiesEmaar MGF Land, LodhaDevelopers, Sahara Prime City and Ambience Ltdare looking to mop-up over US$ 2.35 billion through public offerings.


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Foreign Direct Investment:Investing in Real Estate in India

Indian real estate has huge potential demand in almost every sectorespecially commercial, residential, retail, industrial, hospitality,healthcare etc.Commercial office space requirement is led by the burgeoningoutsourcing and Information Technology Industry. The leaders of theIT/ITES world have set up or are setting up their centers in India.Estimated demand from IT/ITES sector alone is expected to be 150mn

sq.ft. of space across the major cities by 2010.In residential sector there is housing shortage of 19.4 million units out ofwhich 6.7 million are in urban India.The increase in purchasing power and exposure to organized retailformats has redefined the consumption pattern. As a result the countryhas experienced mushrooming of retail projects across the cities.Themain growth thrust is coming due to favorable demographics, increasingpurchasing power, existence of customer friendly banks & housing

finance companies, professionalism in real estate and favorable reformsinitiated by the government to attract global investors.

Foreign Investment (FDI) in Real Estate Sectors

in India

Foreign Direct Investment is encouraged and permitted, subject tocertain conditions, in the following real estate sectors in India:

Hotel Development Tourism Hospitality Township development Developing Commercial Real Estate Built-up infrastructure


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Housing and construction projects Building Resorts Building Hospitals Building Educational institutions Building Recreational facilities Infrastructure projects: regional and local level Special Economic Zones (SEZ's)

Conform with all applicable local and state laws, and abide by allregulations and norms.

FDI in Real Estate in India

Previously, only NRI's and PIO's were allowed to invest in the housingand the real estate sectors. Foreign investors other than NRIs wereallowed to invest only in development of integrated townships andsettlements either through a wholly-owned subsidiary or through a jointventure (JV) company along with a local partner.

India fully opened FDI in real estate in 2005. However, norms issuedlater made a minimum capitalization of $10 million for wholly-owned

subsidiaries and $5 million for joint ventures mandatory. Thegovernment also imposed a minimum area requirement.

The department of industrial policy and promotion had in March 2005allowed FDI in real estate in projects in a minimum area of 25 acres.

The finance ministry has allowed external commercial borrowing (ECB)in realty projects involving integrated townships of 25 acres or 50,000 sqm. However, the Reserve Bank of India has not yet notified it.

At present, the government allows FDI in real estate, but does not permitforeign institutional investment. It is, however, considering a proposalnot to view FDI and FII as distinct investment flows while specifying anoverall limit.


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It is yet to permit foreign venture capital investors (FVCI) in the realtysector. To ensure that the concept of special economic zones (SEZs) didnot distort the realty market, the RBI has classified lending to SEZs onpar with commercial real estate, according it higher risk weight and

provisioning.

The RBI allows ECB in real estate projects involving integratedtownships of 100 acres or more. In real estate projects, a large portion of

money is required for land acquisition, which is classified as workingcapital. But end-use restrictions like not allowing ECB money to be usedfor working capital take away its attractiveness.

Foreign Funds Investors in India: RBI puts curbson FII entry in real estate IPOs

The foreign portfolio investment in real estate in India has come underregulatory glare. The Reserve Bank of India (RBI) has thrown in acaveat on FII subscription to public equity offerings by real estatecompanies. The RBI is of the opinion that such firms can sell their initialor follow-on public stock offerings to FIIs, only if the real estate projects

being developed fulfill the conditions for foreign direct investment. Thecentral bank, which has the last word on cross-border fund inflow, hasindicated this to investment bankers and advisors of real estate firmsplanning to tap the capital market. One of the companies planning anissuance has already dropped the idea of marketing shares of itsforthcoming equity issue to FIIs; while another firm has positioned itselfas a construction company (one which doesn't own the land as distinctfrom a real estate company) to sidestep the restriction. The issue has

boiled down to subtle differences between FII and FDI.

The facts are: real estate projects can attract FDI up to 100 percent,subject to certain conditions which were spelt out by the government inApril '05. These conditions include minimum area to be developed,minimum capitalization, no repatriation of original investment before 3


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years and ban on sell of under-developed plots. If a project meets theseconditions, the concerned company can attract FII subscription up to 24percent equity, and later revise it to the sectoral FDI cap, which is 100percent in this case.

However, for a company not willing to meet the stringent projectconditions, the FII route could be used to overcome the rules and bringin foreign investment. All the company needs to do is get FIIs that areregistered with SEBI to invest in the IPO. This is what the RBI ispossibly objecting to. Interestingly, the regulator is not averse to FIIsbuying shares in the secondary market. In other words, even though FIIscannot subscribe to a real estate firm's IPO (if the project concerned is

non-FDI compliant), they can buy shares through a registered brokeronce the company gets listed.

Madaan & Co. believes that further clarifications are required by theRBI in order to clear the contradictions in various policies of theGovernment of India.

Conditions for Foreign Investment inReal Estate Sector in India

Foreign Direct Investment in some of the aforesaid areas (not all) issubject some conditions, some of which are as follows:

Develop a minimum land area of 10 hectares for serviced housingplots, and a minimum built-up area of 50,000 sq m in case of

construction projects. The policy does not clearly define built-up,though FSI (Floor Space Index)/FAR (Floor Area Ratio) could beused as a basis for the same.

Fulfill the minimum capitalization norm of $10 million for awholly-owned subsidiary and $5 million for JVs. The funds would


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have to be brought in within six months of commencement ofbusiness (which needs to be defined) of the subsidiary or JV.

Complete at least 50% of the integrated project within five yearsfrom the date of obtaining all clearances.

Do not sell undeveloped plots (with no infrastructural backup).Provide infrastructure and obtain the completion certificate fromthe concerned local body before disposal. This clause needsamendment because certificates are sometimes not issued formonths on end, even years, an uncertainty which tends to raiseproject cost, often beyond viability.

Do not repatriate original investment before three years fromcompletion of minimum capitalization. Early exits require prior

approval of the Foreign Investment and Promotion Board.


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SEBI Norms for Real EstateSecurities and Exchange Board of India (SEBI) has issued guidelines on

real estate mutual funds (REMFs). Once these investment vehicles seethe light of the day, small investors will be able to participate in, andprofit from, the real estate growth story.

The way the policy is evolving in India, initially REMFs will be allowedto invest in listed entities only. The next step will be to set up real estateinvestment trusts (REITs), which will be allowed to invest directly inreal estate assets. This graduated approach is being followed to allowtime for the market to mature, and so that public money is not put toundue risk..


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Real Estate Laws inIndia

Investing in real estate in India require compliance with various lawswhich run into dozens, some of them more than 100 years old and somevery new. In addition to federal laws of India, there are many state lawsgoverning real estate transactions and investment. The federal lawsgoverning real estate include:

Indian Transfer of Property ActThe Transfer of Property Act governs the transfer of property by variousmeans. Sales, mortgages (other than by way of deposit of title deeds)and exchanges of immovable property are required to be registered byvirtue of the Transfer of Property Act. Therefore, all the abovedocuments must be in writing and registered.

Indian Registration Act, 1908

The purpose of this Act is the conservation of evidence, assurances, title,publication of documents and prevention of fraud. It details theformalities for registering an instrument. Instruments which requiremandatory registration include:(a) Instruments of gift of immovable property;(b) other non-testamentary instruments which purport or operate tocreate, declare, assign, limit or extinguish, whether in present or in

future, any right, title or interest, whether vested or contingent, to or inimmovable property;(c) non-testamentary instruments which acknowledge the receipt orpayment of any consideration on account of instruments in (2) above.(d) leases of immovable property from year to year, or for any termexceeding one year, or reserving a yearly rent ,Sales, mortgages (other


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than by way of deposit of title deeds) and exchanges of immovableproperty are required to be registered by virtue of the Transfer ofProperty Act. Evidently, therefore, all the above documents have to be inwriting.

Section 17 of the Act provides for optional registration. An unregistereddocument will not affect the property comprised in it, nor be received asevidence of any transaction affecting such property (except as evidenceof a contract in a suit for specific performance or as evidence of part-performance under the Transfer of Property Act or as collateral), unlessit has been registered. Thus the doctrine of part performance dealt withunder Section 53 A of the Transfer of Property Act and the provision ofSection 49 of the Registration Act (which provide that an unregistered

document cannot be admissible as evidence in a court of law except assecondary evidence under the Indian Evidence Act) together protect thebuyer in possession of an unregistered sale deed and cannot bedispossessed. The net effect has been that a large number of propertytransactions have been accomplished without proper registration. Furtherother instruments such as Agreement to Sell, General Power of Attorneyand Will have been indiscriminately used to effect change of ownership.Therefore, investors in real estate have to be careful in their duediligence.

Indian Urban Land (Ceiling And Regulation)

Act, 1976

This legislation fixed a ceiling on the vacant urban land that a 'person' inurban agglomerations can acquire and hold. A person is defined toinclude an individual, a family, a firm, a company, or an association orbody of individuals, whether incorporated or not. This ceiling limitranges from 500-2,000 square meters. Excess vacant land is either to besurrendered to the Competent Authority appointed under the Act for asmall compensation, or to be developed by its holder only for specified


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purposes. The Act provides for appropriate documents to show that theprovisions of this Act are not attracted or should be produced to theRegistering officer before registering instruments compulsorilyregistrable under the Registration Act.

This legislation was repealed by the federal government in 1999. TheRepeal Act, however, shall not affect the vesting of the vacant land,which has already been taken possession by the State Government orany person duly authorized by the State Government in this regard underthe provisions of Urban Land Act. The repeal of the Act, it is believed,has eliminated the large amount of litigation and released huge chunksof land into the market. However the repeal of the Act has not been

carried out in all states. Initially the repeal Act was applicable inHaryana, Punjab and all the Union Territories. Subsequently, it has beenadopted by the State Governments of Uttar Pradesh, Gujarat, Karnataka,Madhya Pradesh and Rajasthan. Andhra Pradesh, Assam, Bihar,Maharashtra, Orissa and West Bengal have not adopted the Repeal Actso far.

Stamp Duty

Stamp duty is required to be paid on all documents which are registeredand the rate varies from state to state. India has perhaps one of thehighest levels of stamp duty. Some states even have double stampincidence, first on land and then on its development.

Rent Control Acts

Rent legislation in India has been in existence for a very long time. Rentcontrol by the government initially came as a temporary measure toprotect the exploitation of tenants by landlords after the Second WorldWar. However these rent control acts became almost a permanent


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feature. Rent legislation provides payment of fair rent to landlords andprotection of tenants against eviction. Besides, it effectively allows thetenant to alienate rented property.

Property Tax

Property tax is a levy charged by the municipal authorities for theupkeep of basic civic services in the city. In India it is the owners ofproperty who are liable for the payment of municipal taxes. Generally,the property tax is levied on the basis of reasonable rent at which the

property might be let from year to year. The reasonable rent can beactual rent if it is found to be fair and reasonable. In the case ofproperties not rented, the rental value is to be estimated on the basis ofletting rates in the locality.


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Business sectorWith the development of private property ownership, real estate hasbecome a major area ofbusiness, commonly referred to as commercialreal estate. Purchasing real estate requires a significant investment, andeach parcel of land has unique characteristics, so the real estate industryhas evolved into several distinct fields. Specialists are often called on tovaluate real estate and facilitate transactions. Some kinds of real estatebusinesses include:

Appraisal: Professional valuation services

Brokerages: A fee charged by the mediator who facilitates a realestate transaction between the two parties.

Development: Improving land for use by adding or replacingbuildings

Net lease Property management: Managing a property for its owner(s) Real estate marketing: Managing the sales side of the property

business

Corporate Real Estate: Managing the real estate held by acorporation to support its core businessunlike managing the realestate held by an investor to generate income

Within each field, a business may specialize in a particular type of realestate, such as residential, commercial, or industrial property. Inaddition, almost all constructionbusiness effectively has a connection toreal estate.
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Residential real estateThe legal arrangement for the right to occupy a dwelling is known as thehousing tenure. Types of housing tenure include owner occupancy,Tenancy, housing cooperative, condominiums (individually parceledproperties in a single building), public housing, squatting, andcohousing.

Residences can be classified by, if, and how they are connected toneighboring residences and land. Different types of housing tenure canbe used for the same physical type. For example, connected residents

might be owned by a single entity and leased out, or owned separatelywith an agreement covering the relationship between units and commonareas and concerns.

Single-family detached home'

o Attached / multi-unito Apartment - An individual unit in a multi-unit building. The

boundaries of the apartment are generally defined by a

perimeter of locked or lockable doors. Often seen in multi-story apartment buildings.

o Terraced house (townhouse orrow house) - A number ofsingle or multi-unit buildings in a continuous row with sharedwalls and no intervening space.

o Condominium - Building or complex, similar to apartments,owned by individuals. Common grounds are owned andshared jointly. There are townhouse orrowhouse style

condominiums as well.o Cooperative (a.k.a. "co-op) - A type of multiple ownership in

which the residents of a multiunit housing complex ownshares in the cooperative corporation that owns the property,giving each resident the right to occupy a specific apartmentor unit.
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Semi-detached dwellingso Duplex - Two units with one shared wall.

The size of an apartment or house can be described in square feet or

meters. This includes the area of "living space", excluding the garageand other non-living spaces. The "square meters" figure of a house inEurope may report the total area of the walls enclosing the home, thusincluding any attached garage and non-living spaces, which makes itimportant to inquire what kind of surface definition has been used.

It can be described more roughly by the number of rooms. A studioapartment has a single bedroom with no living room (possibly a separatekitchen). A one-bedroom apartment has a living or dining room separatefrom the bedroom. Two bedroom, three bedroom, and larger units arecommon. (A bedroom is defined as a room with a closet for clothesstorage.)

See List of house types for a complete listing of housing types andlayouts, real estate trends for shifts in the market and house orhome formore general information.

Mortgages in real estate

In recent years, many economists have recognized that the lack ofeffective real estate laws can be a significant barrier to investment inmany developing countries. In most societies, rich and poor, asignificant fraction of the total wealth is in the form of land andbuildings.

In most advanced economies, the main source of capital used by

individuals and small companies to purchase and improve land andbuildings is mortgage loans (or other instruments). These are loans for

which the real property itself constitutes collateral. Banks are willing to

make such loans at favorable rates in large part because, if the borrower

does not make payments, the lender can forecloseby filing a court action
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which allows them to take back the property and sell it to get their

money back. For investors, profitability can be enhanced by using an off

plan or pre-construction strategy to purchase at a lower price which is

often the case in the pre-construction phase of development
http://en.wikipedia.org/wiki/Off_planhttp://en.wikipedia.org/wiki/Off_planhttp://en.wikipedia.org/wiki/Off_planhttp://en.wikipedia.org/wiki/Off_plan


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RESEARCH

METHODOLGY


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RESEARCHMETHODOLOGY

Necessity is the mother of invention

Research methodology is a plan of action to be carried out in connection with a research

report. The population for the study consists of all the investors who are investing a part of their

income in various schemes on financial instruments. The data for the study was collected with

the help of structured questionnaires.

RESEARCH DESIGN

Research design is the basic framework which provides guidelines for the rest of research

process. The survey done for this project conveys Regional information. Scope of survey is

limited to Ludhiana City. The research design specifies:-

TYPE OF RESEARCH

This is descriptive type of research in which clients has been surveyed to check their preferences

regarding investment in real estate.

METHOD OF DATA COLLECTION

There are two methods of data collection. For study both primary and secondary data was

collected.

o Primary Data: For collecting primary data I used a questionnaire. Under this

questionnaire, the questions, which were related to check the customers preference

about investing in real estate , are included. The data was collected in the field through

questionnaires to get the meaningful information not available for secondary data.


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o Secondary Data: This data was taken from published media and internet.

SAMPLING UNIT

The data was collected from various locations of Ludhiana. Data was collected from

businessmen and service class.

SAMPLE SIZE

50 respondents.

CONTACT METHOD

I personally interacted with people to fill up the questionnaire so that I may able to complete my

survey.

SAMPLE DESIGN

For drawing the sample convenient sampling has been used to save time and to meet my

Objectives.

STATISTICAL TOOLS

Bar graph diagrams and Pie charts have used to understand the result analysis.


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OBJECTIVES

OF THE

STUDY


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Objectives of the study

To know customers perception about real estate as an investment

option.

To know the reasons why people invest or want to invest in real

estate.

To identifying the factors considered while purchasing real estate.


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ANALYSIS &

INTERPRETATION


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Questionnaire Analysis

Q1. - Annual family income of respondents

Interpretation:-As per the study majority of the respondents had an annual income of Rs 1-5

lakh

Annual income ( Rs Lakh) No of Respondents Percentage

1 O 0

1-5 30 60 %

5-10 13 26 %

Above 10 7 14 %

Total 50 100 %

below 1lakh0%

1-5 lakh60%

5-10 lakh26%

above 1014%

Annual Income of Respondents


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Q2. Do you invest?

Do you Invest No of respondents Percentage

Yes 50 100 %

No 0 0 %

Total 50 100

Interpretation: - As per the study all the respondents had invested their money

Yes100%

No0%



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Q3. - Which part of your savings/surplus funds do you invest?

Interpretation:-Most of the people invest 10%-20% of their surplus funds/savings. About 50%

people who invest 10%-20% of the savings. After that there are 24% of the people invest 20%-30% of savings.

Below 10%20%

10%-20%50%

20%-30%24%

30%-40%6%


Annual income ( Rs Lakh) No of Respondents Percentage

Below 10% 10 20 %

10% - 20% 25 50 %

20% - 30% 12 24 %

30% - 40% 3 6 %

Total 50 100 %


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Q4 .where are you currently investing your funds?

Interpretation: - Out of 50 people their are 20 people currently investing in real estate and 10

people are investing in bank deposits and 7 people invest in others option such as life insurance

following them 5 people each invest in shares & gold & silver and only 3 people are investing in

mutual funds

Investment options

Respondents

Percentage (out of 20

respondents)

Shares 5 10%

Fixed Deposits 10 20 %

Property 20 40%

Mutual Funds 3 6%

Gold & silver 5 10%

Others( life insurance etc) 7 14%

10%

20%

40%6%

10%

14%

Respondents

shares bank deposits property

Mutual Funds gold & silver others


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Q5.:(A): If in real estate , specify reasons.

Interpretation: - Most of the people invest in real estate because of the steep increase in market

value

steep increase

in market value,62%

safe option, 20%

parking illegalfunds, 18%

Investment Concerns of respondents

Particulars Respondents Percentage(out of 20)

Parking illegal funds 9 18%

Steep increase in market

value 31

62%

Safe option 10 20%


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(B): IF not invest in real estate. Specify reasons

-

Interpretation: - Most of the people do not invest in real estate because of high entry cost. It

need a high cost to invest in real estate.

Litigation, 0%

High entry cost,60%

Highintermediary cost,

20%

Not sufficientwhite money,

20%

not easy toliquidate, 16%

Investment optionsRespondents

Percentage ( out of 20respondents)

Litigation 0 0

High entry cost 30 16 %

High intermediary cost 10 20 %

Not sufficient white money 2 8 %

Not easy to liquidate 8 24 %


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Q6. Have you ever invested / or want to invest in real estate ?

Do you Invest No of respondents Percentage

Yes 30 100%

No 0 0

Total 30 100%

Interpretation: - As per the study all the respondents want to invest their money

Yes100%

No0%



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Q7: Do you consider investment in real estate as.

Interpretation: -Almost 50% of the people want to invest in real estate as a short term option

because of high rate of return.

A long termoption, 20%

A medium termoption, 30%

A short termoption, 50%



A long term option 10 20%

A medium term option 15 30%

A short term option 25 50%


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Q8. Rank real estate as an investment option against others on the

following parameters.

INTERPRETATION:- Most of the people wants to invest in real estate because of

rate of return. The rate of return in real estate is so high that people want to get

back it as early as possible .but according to other parameters it stands on

2nd

(flexibility), 5th (safety) , 5th

(liquidity) in table.

Factors Flexibility Liquidity

Returns Safety

Real estate 12 3 25 5

Mutual funds 8 7 8 15

Stocks7 9 10 12

Banks 8 20 2 8

Gold & silver 15 11 5 10


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Q9: where would you refer to invest in real estate ?

Interpretation :- According to the statics almost people want to invest in govt

approved areas & only 20% people want to invest in unapproved & no one

want to invest for agricultural land.

govt.approved, 80%

unapproved,20%

agricultural,0%


Govt. approved 40 80%

Unapproved 10 20%

Agricultural 0 0%


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Q10: which information sources influence your decision of investing in real

estate?

Interpretation: -Most of the people invest in real estate after consult to a broker .there are

around 50% people who decide to invest in real estate after consult to a broker . 30% people

invest in real estate who are influenced by some relatives/friends.

Bankers, 0%

Architect, 20%

Broker, 50%

Relative/friend,30%


Bankers 0 0

Architect 10 20%

Broker 25 50%

Relation/friend 15 30%


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Q11: How do you finalize your decision regarding investment in real estate ?

Interpretation: -Many people try to visit the site before investing in real estate .Around 40% of

the people visit the site before investing & other 60% people both visit a no. of sites & talk to

broker before investing.

Visit the site,40%

Visit many other

sites, 30%

talk to broker,30%



Visit the site 20 40%

Visit a no. of sites 15 30%

Talk to broker 15 30%


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Q12. Considering the current market position, would you continue to invest in real estate in the

coming yrs.

Interpretation: -Around 30% people definitely continue their investment in real estate after

considering the current situation.

Respondents

definitely likely unlikely never

30

15 3 2

Importance of various investment Factors

Definitely likely Unlikely Never

30 15 3 2


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Q13: Are you satisfied with your investment in real estate & its returns?

Interpretation: - There are 20 people who are satisfied with investing in real estate & 15 people

are neutral & only 2 people are highly satisfied whereas only 8 people are dissatisfied with

investment in real estate.

Highly satisfied satisfied neutral dissatisfied Highly dissatisfied

2

20

15

85

Importance of various investment Factors

Highly

satisfied

Satisfied Neutral Dissatisfied Highly

Dissatisfied

2 20 15 8 5


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FINDINGS AND

SUGGESTIONS


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RESULTS & FINDINGS As per statics most of the people have 1-5 lakhs their family

income & all are investing money in which 50% people are

investing 10%-20% part of their savings & 24% people investing

their20%-30%part their savings.

Out of 50 people their are 20 people currently investing in real

estate because of the steep increase in market value and 10 people

are investing in bank deposits and 7 people invest in others optionsuch as life insurance following them 5 people each invest in

shares & gold & silver and only 3 people are investing in mutual

funds .Most of the people do not invest in real estate because of

high entry cost. It needs a high cost to invest in real estate.

As perthe study all the respondents want invest money in real

estate in which 50% respondents want to invest money in real

estate as a short term option 30% want to invest in R.E as a

medium term option & only 10% want to invest as a long term

option.

According to the statics almost all the people want to invest in govt

approved areas & only 20% people want to invest in unapproved &

no one want to invest for agricultural land.

Most of the people invest in real estate after consult to a broker

.there are around 50% people who decide to invest in real estate

after consult to a broker . 30% people invest in real estate who are

influenced by some relatives/friends & Many people try to visit the


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site before investing in real estate .Around 40% of the people visit

the site before investing & other 60% people both visit a no. of

sites & talk to broker before investing.

Around 30% people definitely continue their investment in real

estate after considering the current situation. & There are 20

people who are satisfied with investing in real estate & 15 people

are neutral & only 2 people are highly satisfied whereas only 8

people are dissatisfied with investment in real estate.


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LIMITATIONS


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LIMITATIONS TO THE

RESEARCH

As the data will be collected through questionnaire, there are chances of biased information

provided by the respondent.

The survey is limited only to Ludhiana city.

As the sample size is small compared to the total population the outcome cannot

be generalized.

The Qualitative responses are affected by the mental framework of the respondent

at the time of the interview and hence only are approximate.

The study was done for a short period of time, which might not hold true over a

long period of time.


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BIBLIOGRAPHY


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BIBLIOGRAPHY

www.google.com

www.wikipedia.com
http://www.google.com/http://www.google.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.google.com/


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Conclusion

As the research was carried out some of the following aspect are coming out

which are following:

As per the survey & the current market condition the people want to invest in real

estate because of the steep return from real estate. People are satisfied with

investing real estate & may concern to a broker or relative/friend & visit a no. of

sites before investing in real estate. But it is not possible for everyone to invest in

real estate because of the high entry cost .people need lots of savings/surplus

funds to invest in real estate.


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ANNEXURE


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QUESTIONNAIRE

Name

Age :-

Gender: - O Male O Female

Phone no.____________________________

Q1. In which income group do you fall? (Annual family income)

Below 1,00,000 1,00,000 to 5, 00,000

5, 00,000 to 10, 00,000 Above 10, 00,000

Q2. Do you invest?

Yes No

Q3. Which part of your savings/surplus funds do you invest?

Below 10% 10%-20%

20%-30% 30%-40%

Q4 .Where are you currently investing your funds?

Real estate mutual funds

Stocks banks deposits

Gold & silver other


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Q5. If in real estate specify reasons.

steep increase in market value

safe option

parking illegal funds

any other _______________________________________________________

if not invested in real estate specify reasons

litigation

high entry cost

high intermediary cost

not sufficient white money

not easy to liquidate

Q6. Have you ever invested / or want to invest in real estate ?

Yes No

Q7. Do you consider investment in real estate as.

A long term option

A medium term option

A short term option


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Q8. Rank real estate as an investment option against others on the

following parameters.

Q9: where would you refer to invest in real estate ?

Govt approved (puda)

Unapproved

Agricultural land

Reason why __________________________________________

Q10. What information sources influence your decision of investing in R.E.

Bankers

Architect

Broker

Factors Flexibility Liquidity

Returns Safety

Real estate

Mutual funds

Stocks

Banks

Gold & silver


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Relatives / friends

Q11. How do you finalize your decision regarding investment in R.E.

Visit the site

Visit a no. of sites

Talk to broker

Q12. Considering the current market situation, would you like to invest more

in R.E in the coming yrs.

Q13: Are you satisfied with your investment in real estate & its returns?

Definitely likely Unlikely Never

Highly

satisfied

Satisfied Neutral Dissatisfied Highly

Dissatisfied

Date post:	03-Apr-2018
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Customer Perception About REAL ESTATE as an Investment Option

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