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

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

INTRODUCTION

TO REAL ESTATE

Real estate
Real estate is a legal term that encompasses land along with improvements to the land, such as buildings, fences, wells and other site improvements that are fixed in location immovable. Real estate law is the body of regulations and legal codes which pertain to such matters under a particular jurisdiction and include things such as commercial and residential real property transactions. Real estate is often considered synonymous with real property (sometimes called realty), in contrast with personal property (sometimes called chattel or personally under chattel law or personal property law). However, in some situations the term "real estate" refers to the land and fixtures together, as distinguished from "real property," referring to ownership of land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof. Real property is typically considered to be Immovable property[2] The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property.

Real estate terminology and practice outside the United States (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 of probate law, and means all interests in land held by 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 from the way that it is conducted in the United States. Some similarities include a variety of legal formalities (with professionals such as real estate agents generally employed to assist the buyer); taxes need to be paid (but typically less than those in U.S.); legal paperwork will ensure title; and a neutral party such as a title company will handle documentation and monies in order to make the smooth exchange between the parties. Increasingly, U.S. title companies are doing work for U.S. buyers in Mexico and Central America. Prices are often much cheaper than most areas of the U.S., but in many locations, 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 loans for properties in Mexico, but, so far, not for other Latin American countries. One important difference from the United States is that each country has rules regarding where foreigners can buy. For example, in Mexico,

foreigners cannot buy land or homes within 50 km of the coast or 100 km from a border unless they hold title in a Mexican Corporation or a Fideicomiso (a Mexican trust). In Honduras, however, they may buy beach front property directly in their name. There are different rules regarding certain types of property: ejidal land communally held farm property can only be sold after a lengthy entitlement process, but that does not prevent them from being offered for sale. In Costa Rica, real estate agents do not need a license to operate, but the transfer of property requires a lawyer.

India
India is currently in the process of formulating definitive legislation for the introduction and smooth functioning of REITs in the Indian real estate market. Once introduced these Indian REITs (country specific/generic version I-REITs) will help individual investors enjoy the benefits of owning an interest in the securitised real estate market. The best benefit being that of fast and easy liquidation of investments in the real estate market unlike the traditional way of disposing real estate. The government and Securities and Exchange Board of India SEBI through various notifications is in the process of easing the norms of investing in real estate in India directly and indirectly through foreign direct investment, through listed real estate companies, mutual funds etc. With the current real estate boom and the market being flooded with Initial Public Offer of various listed real estate companies in India it will be the best time for investors to own a share of the profiting market economy. Legislative framework, revised investment norms, a favourable investment opportunity, and a clear taxation policy will provide the right kind of investing opportunity in India in the time to come. India has been witnessing a Real Estate boom in last few years. Primarily powered by the growth in information technology industry, the

boom had taken property rates to the sky. Politician-Builder-Banker lobbies 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 the rates were came down heavily in coming months, ie, after the end of 2008. October used to be the month with highest number of bookings in the residential property business, due to Dussera and Diwali. Contrary to builders' expectations, the bookings have been very few in the first half of October, which indicates the heavy reduction in demand. Buyers have 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's economy. The real estate sector is second only to agriculture in terms of employment generation and contributes heavily towards the gross domestic product (GDP). Almost five per cent of the country's GDP is contributed to by the housing sector. In the next five years, this contribution 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 of those nations recovering at a faster rate than the UK and US real estate markets. It has also been suggested that India's property sector could begin to improve from late 2009 and may attract up to US$ 12.11 billion in 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 22.4 million dwelling units. Thus, over the next 10 to 15 years, 80 to 90 million housing dwelling units will have to be constructed with a majority of them catering to middle- and lower-income groups.

Moreover, India leads the pack of top real estate investment markets in Asia for 2010, according to a study by PricewaterhouseCoopers (PwC) and Urban Land Institute, a global non-profit education and research institute. The report, which provides an outlook on Asia-Pacific real estate investment and development trends, points out that India, particularly Mumbai and Delhi, are good destinations. Residential properties are viewed as more promising than other sectors and Mumbai, Delhi and Bangalore top the pack in the hotel buy' prospects as well. The study is based on the opinions of over 270 international real estate professionals, including investors, developers, property company representatives, 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 in India is 18 per cent, which is double the profitability for a construction project 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). In fact, according to a CRISIL paper, the REITs would have the potential to hold at least 5 per cent share of the total global real estate market by 2010, the size of which would reach US$ 1,400 billion in the next three years. The paper titled, Indian REITs; Are We Prepared', says that by 2010, REITs alone would hold a market size of US$ 70 billion of the total real estate market as its concept is gaining ground in countries like India and other developing nations. According to the Federation of Indian Chambers of Commerce and Industry (FICCI), the Indian real estate sector is likely to experience consolidation wherein bigger players may opt for outright buy of smaller firms or forge joint ventures or business alliances with them.

Foreign direct investment (FDI) into India in the real estate sector for the fiscal year 2008-09 has been US$ 12.62 billion approximately, according to the latest data given by the Department of Policy and Promotion (DIPP). Moreover, buoyed by positive market sentiment and demand revival in housing, four real estate companiesEmaar MGF Land, Lodha Developers, Sahara Prime City and Ambience Ltdare looking to mopup over US$ 2.35 billion through public offerings.

Foreign Direct Investment: Investing in Real Estate in India

Indian real estate has huge potential demand in almost every sector especially commercial, residential, retail, industrial, hospitality, healthcare etc. Commercial office space requirement is led by the burgeoning outsourcing and Information Technology Industry. The leaders of the IT/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 of which 6.7 million are in urban India. The increase in purchasing power and exposure to organized retail formats has redefined the consumption pattern. As a result the country has experienced mushrooming of retail projects across the cities.The main growth thrust is coming due to favorable demographics, increasing purchasing power, existence of customer friendly banks & housing finance companies, professionalism in real estate and favorable reforms initiated by the government to attract global investors.

Foreign Investment (FDI) in Real Estate Sectors in India

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

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

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 all regulations and norms. FDI in Real Estate in India

Previously, only NRI's and PIO's were allowed to invest in the housing and the real estate sectors. Foreign investors other than NRIs were allowed to invest only in development of integrated townships and settlements either through a wholly-owned subsidiary or through a joint venture (JV) company along with a local partner. India fully opened FDI in real estate in 2005. However, norms issued later made a minimum capitalization of $10 million for wholly-owned subsidiaries and $5 million for joint ventures mandatory. The government also imposed a minimum area requirement. The department of industrial policy and promotion had in March 2005 allowed 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 sq m. However, the Reserve Bank of India has not yet notified it. At present, the government allows FDI in real estate, but does not permit foreign institutional investment. It is, however, considering a proposal not to view FDI and FII as distinct investment flows while specifying an overall limit.

It is yet to permit foreign venture capital investors (FVCI) in the realty sector. To ensure that the concept of special economic zones (SEZs) did not distort the realty market, the RBI has classified lending to SEZs on par with commercial real estate, according it higher risk weight and provisioning. The RBI allows ECB in real estate projects involving integrated townships of 100 acres or more. In real estate projects, a large portion of money is required for land acquisition, which is classified as working capital. But end-use restrictions like not allowing ECB money to be used for working capital take away its attractiveness.

Foreign Funds Investors in India: RBI puts curbs on FII entry in real estate IPOs
The foreign portfolio investment in real estate in India has come under regulatory glare. The Reserve Bank of India (RBI) has thrown in a caveat on FII subscription to public equity offerings by real estate companies. The RBI is of the opinion that such firms can sell their initial or follow-on public stock offerings to FIIs, only if the real estate projects being developed fulfill the conditions for foreign direct investment. The central bank, which has the last word on cross-border fund inflow, has indicated this to investment bankers and advisors of real estate firms planning to tap the capital market. One of the companies planning an issuance has already dropped the idea of marketing shares of its forthcoming equity issue to FIIs; while another firm has positioned itself as a construction company (one which doesn't own the land as distinct from 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 in April '05. These conditions include minimum area to be developed, minimum capitalization, no repatriation of original investment before 3

years and ban on sell of under-developed plots. If a project meets these conditions, the concerned company can attract FII subscription up to 24 percent equity, and later revise it to the sectoral FDI cap, which is 100 percent in this case. However, for a company not willing to meet the stringent project conditions, the FII route could be used to overcome the rules and bring in foreign investment. All the company needs to do is get FIIs that are registered with SEBI to invest in the IPO. This is what the RBI is possibly objecting to. Interestingly, the regulator is not averse to FIIs buying shares in the secondary market. In other words, even though FIIs cannot subscribe to a real estate firm's IPO (if the project concerned is non-FDI compliant), they can buy shares through a registered broker once the company gets listed. Madaan & Co. believes that further clarifications are required by the RBI in order to clear the contradictions in various policies of the Government of India.

Conditions for Foreign Investment in Real Estate Sector in India

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

Develop a minimum land area of 10 hectares for serviced housing plots, 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 be used as a basis for the same. Fulfill the minimum capitalization norm of $10 million for a wholly-owned subsidiary and $5 million for JVs. The funds would

have to be brought in within six months of commencement of business (which needs to be defined) of the subsidiary or JV. Complete at least 50% of the integrated project within five years from the date of obtaining all clearances. Do not sell undeveloped plots (with no infrastructural backup). Provide infrastructure and obtain the completion certificate from the concerned local body before disposal. This clause needs amendment because certificates are sometimes not issued for months on end, even years, an uncertainty which tends to raise project cost, often beyond viability. Do not repatriate original investment before three years from completion of minimum capitalization. Early exits require prior approval of the Foreign Investment and Promotion Board.

SEBI Norms for Real Estate

Securities and Exchange Board of India (SEBI) has issued guidelines on real estate mutual funds (REMFs). Once these investment vehicles see the light of the day, small investors will be able to participate in, and profit from, the real estate growth story. The way the policy is evolving in India, initially REMFs will be allowed to invest in listed entities only. The next step will be to set up real estate investment trusts (REITs), which will be allowed to invest directly in real estate assets. This graduated approach is being followed to allow time for the market to mature, and so that public money is not put to undue risk..

Real Estate Laws in India

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

Indian Transfer of Property Act

The Transfer of Property Act governs the transfer of property by various means. Sales, mortgages (other than by way of deposit of title deeds) and exchanges of immovable property are required to be registered by virtue of the Transfer of Property Act. Therefore, all the above documents 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 the formalities for registering an instrument. Instruments which require mandatory registration include: (a) Instruments of gift of immovable property; (b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, to or in immovable property; (c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of instruments in (2) above. (d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent ,Sales, mortgages (other

than by way of deposit of title deeds) and exchanges of immovable property are required to be registered by virtue of the Transfer of Property Act. Evidently, therefore, all the above documents have to be in writing. Section 17 of the Act provides for optional registration. An unregistered document will not affect the property comprised in it, nor be received as evidence of any transaction affecting such property (except as evidence of a contract in a suit for specific performance or as evidence of partperformance under the Transfer of Property Act or as collateral), unless it has been registered. Thus the doctrine of part performance dealt with under Section 53 A of the Transfer of Property Act and the provision of Section 49 of the Registration Act (which provide that an unregistered document cannot be admissible as evidence in a court of law except as secondary evidence under the Indian Evidence Act) together protect the buyer in possession of an unregistered sale deed and cannot be dispossessed. The net effect has been that a large number of property transactions have been accomplished without proper registration. Further other instruments such as Agreement to Sell, General Power of Attorney and Will have been indiscriminately used to effect change of ownership. Therefore, investors in real estate have to be careful in their due diligence.

Indian Urban Land (Ceiling And Regulation) Act, 1976

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

purposes. The Act provides for appropriate documents to show that the provisions of this Act are not attracted or should be produced to the Registering officer before registering instruments compulsorily registrable under the Registration Act. This legislation was repealed by the federal government in 1999. The Repeal Act, however, shall not affect the vesting of the vacant land, which has already been taken possession by the State Government or any person duly authorized by the State Government in this regard under the provisions of Urban Land Act. The repeal of the Act, it is believed, has eliminated the large amount of litigation and released huge chunks of land into the market. However the repeal of the Act has not been carried out in all states. Initially the repeal Act was applicable in Haryana, Punjab and all the Union Territories. Subsequently, it has been adopted 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 Act so far.

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

Rent Control Acts

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

feature. Rent legislation provides payment of fair rent to landlords and protection of tenants against eviction. Besides, it effectively allows the tenant to alienate rented property.

Property Tax
Property tax is a levy charged by the municipal authorities for the upkeep of basic civic services in the city. In India it is the owners of property 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 be actual rent if it is found to be fair and reasonable. In the case of properties not rented, the rental value is to be estimated on the basis of letting rates in the locality.

Business sector
With the development of private property ownership, real estate has become a major area of business, commonly referred to as commercial real estate. Purchasing real estate requires a significant investment, and each parcel of land has unique characteristics, so the real estate industry has evolved into several distinct fields. Specialists are often called on to valuate real estate and facilitate transactions. Some kinds of real estate businesses include:

Appraisal: Professional valuation services Brokerages: A fee charged by the mediator who facilitates a real estate transaction between the two parties. Development: Improving land for use by adding or replacing buildings 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 a corporation to support its core businessunlike managing the real estate held by an investor to generate income

Within each field, a business may specialize in a particular type of real estate, such as residential, commercial, or industrial property. In addition, almost all construction business effectively has a connection to real estate.

Residential real estate

The legal arrangement for the right to occupy a dwelling is known as the housing tenure. Types of housing tenure include owner occupancy, Tenancy, housing cooperative, condominiums (individually parceled properties in a single building), public housing, squatting, and cohousing. Residences can be classified by, if, and how they are connected to neighboring residences and land. Different types of housing tenure can be used for the same physical type. For example, connected residents might be owned by a single entity and leased out, or owned separately with an agreement covering the relationship between units and common areas and concerns. Single-family detached home'
o o

Attached / multi-unit 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 multistory apartment buildings. Terraced house (townhouse or row house) - A number of single or multi-unit buildings in a continuous row with shared walls and no intervening space. Condominium - Building or complex, similar to apartments, owned by individuals. Common grounds are owned and shared jointly. There are townhouse or rowhouse style condominiums as well. Cooperative (a.k.a. "co-op) - A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.

Semi-detached dwellings o 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 garage and other non-living spaces. The "square meters" figure of a house in Europe may report the total area of the walls enclosing the home, thus including any attached garage and non-living spaces, which makes it important to inquire what kind of surface definition has been used. It can be described more roughly by the number of rooms. A studio apartment has a single bedroom with no living room (possibly a separate kitchen). A one-bedroom apartment has a living or dining room separate from the bedroom. Two bedroom, three bedroom, and larger units are common. (A bedroom is defined as a room with a closet for clothes storage.) See List of house types for a complete listing of housing types and layouts, real estate trends for shifts in the market and house or home for more general information. Mortgages in real estate In recent years, many economists have recognized that the lack of effective real estate laws can be a significant barrier to investment in many developing countries. In most societies, rich and poor, a significant fraction of the total wealth is in the form of land and buildings. In most advanced economies, the main source of capital used by individuals and small companies to purchase and improve land and buildings 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 foreclose by filing a court action

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

RESEARCH METHODOLGY

RESEARCH METHODOLOGY
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.

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.

OBJECTIVES OF THE STUDY

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.

ANALYSIS & INTERPRETATION

Questionnaire Analysis

Q1. - Annual family income of respondents

Annual income ( Rs Lakh) 1 1-5 5-10 Above 10 Total No of Respondents O 30 13 7 50 Percentage 0 60 % 26 % 14 % 100 %

Annual Income of Respondents

above 10 14% below 1lakh 0%

5-10 lakh 26%

1-5 lakh 60%

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

Q2. Do you invest? Do you Invest Yes No Total No of respondents 50 0 50 Percentage 100 % 0% 100

Annual Income of Respondents

No 0%

Yes 100%

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

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

Annual income ( Rs Lakh) Below 10% 10% - 20% 20% - 30% 30% - 40% Total

No of Respondents 10 25 12 3 50

Percentage 20 % 50 % 24 % 6% 100 %

Annual Income of Respondents

30%-40% 6% 20%-30% 24% Below 10% 20%

10%-20% 50%

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.

Q4 .where are you currently investing your funds? Investment options Respondents Shares Fixed Deposits Property Mutual Funds Gold & silver Others( life insurance etc) 5 10 20 3 5 7 Percentage ( out of 20 respondents) 10% 20 % 40% 6% 10% 14%

Respondents
shares bank deposits property

Mutual Funds

gold & silver 40%

others

20%

6%

14% 10%

10%

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

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

Particulars Parking illegal funds Steep increase in market value Safe option

Respondents 9

Percentage(out of 20) 18% 62%

31 10 20%

Investment Concerns of respondents

parking illegal funds, 18%

safe option, 20% steep increase in market value, 62%

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

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

Investment options Respondents Litigation High entry cost High intermediary cost Not sufficient white money Not easy to liquidate 0 30 10 2 8 Percentage ( out of 20 respondents) 0 16 % 20 % 8% 24 %

not easy to liquidate, 16% Litigation, 0% Not sufficient white money, 20% High entry cost, 60% High intermediary cost, 20% 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.

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

Do you Invest Yes No Total No of respondents 30 0 30 Percentage 100% 0 100%

Annual Income of Respondents

No 0%

Yes 100%

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

Q7: Do you consider investment in real estate as.

Particulars A long term option A medium term option A short term option

Respondents 10 15 25

Percentage(out of 20) 20% 30% 50%

Investment Concerns of respondents

A short term option, 50%

A long term option, 20%

A medium term option, 30%

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

Q8. Rank real estate as an investment option against others on the following parameters.
Factors Flexibility Liquidity Returns Safety

Real estate Mutual funds Stocks Banks Gold & silver

12 8 7 8 15

3 7 9 20 11

25 8 10 2 5

5 15 12 8 10

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.

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

Particulars Govt. approved Unapproved Agricultural

Respondents 40 10 0

Percentage(out of 20) 80% 20% 0%

agricultural, 0% unapproved, 20%

govt. approved, 80%

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.

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

Particulars Bankers Architect Broker Relation/friend

Respondents 0 10 25 15

Percentage(out of 20) 0 20% 50% 30%

Bankers, 0%

Relative/friend, 30%

Architect, 20%

Broker, 50%

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.

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

Particulars Visit the site Visit a no. of sites Talk to broker

Respondents 20 15 15

Percentage(out of 20) 40% 30% 30%

Investment Concerns of respondents

talk to broker, 30%

Visit the site, 40%

Visit many other sites, 30%

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.

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

Definitely 30

likely 15

Unlikely 3

Never 2

Importance of various investment Factors

30 15 definitely likely 3 unlikely 2 never Respondents

Interpretation: -Around 30% people definitely continue their investment in real estate after considering the current situation.

Q13: Are you satisfied with your investment in real estate & its returns? Highly satisfied 2 20 15 8 Satisfied Neutral Dissatisfied Highly Dissatisfied 5

Importance of various investment Factors

20 15 8 2 Highly satisfied satisfied neutral 5

dissatisfied Highly dissatisfied

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.

FINDINGS AND SUGGESTIONS

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 option such 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

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.

LIMITATIONS

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.

BIBLIOGRAPHY

BIBLIOGRAPHY
www.google.com www.wikipedia.com

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.

ANNEXURE

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 5, 00,000 to 10, 00,000 Q2. Do you invest? Yes No 1,00,000 to 5, 00,000 Above 10, 00,000

Q3. Which part of your savings/surplus funds do you invest? Below 10% 20%-30% 10%-20% 30%-40%

Q4 .Where are you currently investing your funds? Real estate Stocks Gold & silver mutual funds banks deposits other

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

Q8. Rank real estate as an investment option against others on the following parameters.
Factors Flexibility Liquidity Returns Safety

Real estate Mutual funds Stocks Banks Gold & silver

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

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. Definitely likely Unlikely Never

Q13: Are you satisfied with your investment in real estate & its returns? Highly satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied