Professional Documents
Culture Documents
Submitted
by
Group No: A2
Name of the students
Aakanksha Thete
Antony Attokaran
Rajgopal Balabhadruni
Sachin Kulkarni
Swetha R
15F101
15F110
15F140
15F142
15F156
Real estate is one of the best investment options as its returns are high
with relatively lesser risks. With the current state of the economy
investments in real estate is ideally suited as they provide a sense of
financial security as well. The business plan what we are suggesting is
both owning a piece of land and converting it into a Paying guest or
leasing a building and give percentage of profit as the owners cut. A PG
guarantees monthly cash flows which can either be taken directly as
monthly profits or can be used to pay the debt incurred during buying of
real estate.
The booming job and education
sectors in Bangalore have led to the mushrooming of paying guest
accommodations. Paying Guest or PG, as we know it, is increasingly
becoming popular among young professionals (18-26 years), especially in
metros. The concept of PG is not new but there is a greater appreciation of
this concept now. PG is a preferred option among young people who move
away from their native place either for higher studies or for an
employment
opportunity.
In
new
city,
finding
the
right
PG
first, since it has lots of potential. Currently there are many areas in the
city where we can start this. We plan to start it from Whitefield. The area
is also centrally located to many MNCs and has easy accessibility from
other parts of Bangalore. It is well connected area, which has seen
tremendous growth in past few years and provides a perfect ambience for
our business
Challenges
Finding
the
best
location
and
investing
in
the
real
estate
Technical Feasibity
Why Choose Whitefield?
The IT/ITeS sector continues to be a dominant growth driver for
Bangalore, and some areas stand out from the rest as far as the impact
of this sector is concerned. Whitefield in the eastern part of Bangalore
is one such area. Whitefield was an early settlement in Bangalore and
remained a quaint little suburb till the 2000s, when Bangalores IT
boom reshaped Whitefield into a major suburb.
Whitefield is a
In each floor six rooms of 300 sq feet can be fit in with common area
for passage
Initial Investment
1
2
3
4
Particulars
Number
Construction of the building 1
Television
24
4000000
480000(20000*24
Cot
Table
)
72000(1500*48)
60000(1250*48)
48
48
5
6
7
8
Chair
Geyser
Router
Water purifier
48
24
4
4
38400(800*48)
72000(3000*24)
2000(500*4)
4800(1200*4)
Breakfast expenses
Dinner Expenses
Cook
Internet connection
TV cable expense
Security Maintenance
Cleaners (Nos. 2)
News paper
General
electricity
44000
72000
12000
6000 (Entire building)
6000
5000
8000
2900
2000
10
11
expense
General Water expense
General maintenance
1000
2000
Financial Tabulations
To invest for the fixed costs involved bank loan can be taken. As bank
doesnt usually pay such corpus amount as loan to individuals, three
partners can be pooled in. An amount of 9000000 can be taken by the
three partners and the remaining sum needed has to self financed
The interest amount to be paid has to be given out from the profits
made by renting.
As you can see, the monthly profit of 128000 should be divided into
three partners. The burden of paying EMIs will cease to exist.
As months pass on, the prices are bound to inflate so would be the
prices of the rent.
Within 10 years the amount taken as debt will be paid. At this point
of time two options persist.
Option 1: The three partners can together decide and sell the
PG which would definitely tremendous returns. As per the
property rates prevalent in Bangalore, It takes 3 years to
double the investments. Within 10 years the piece of property
would fetch a minimum of 50000000. This money should be
divided into the three partners again.
Conclusion
Although its not a novel idea but with the given tradeoff between risk and
return, this idea does provide a viable option as to better put ones
savings into a profitable venture. The similar model can be expanded to
other areas in Bangalore or even in other cities as well. Tier 1 and Tier 2
cities can be previewed as good investment options.