The real estate industry in India is the second-largest employer and is predicted to account for 13% of the
country’s GDP by 2025. And, when you consider the ever-growing disposable income of the middle class(which is obviously, the largest pie of the circle), it makes complete sense why Indian real estate is among the top 10 appreciating markets in the world. (Source: Seedwill.co)
Then you look at the number of potential investors; let us tell you that we’re home to the world’s youngest population. (Average age: 29 years). It’s a ripe and flourishing market, indeed!
However, there are a few challenges that people have to face when considering investing in a property:
- High entry barrier
- Market Liquidity
- Transaction security
- Over-complicated process(multiple stakeholders involved)
- Transaction sanctity
And if you’ve been in or around the field, you’d know what we are talking about. Sometimes, buyers aren’t even sure if the property they’re interested in is free from any legal disputes and encumbrances. And the high entry barrier for Indian youth in their 20s and 30s tops all other challenges.
Our founders decided to create a viable solution that can beat all these challenges.
And, PropFTX was born with the idea of covering the gaps one after another and offering the market that much-needed alternative.
Throughout this article, we’ll see how exactly PropFTX does that, and why it can be the best investment option for you. Through the lens of our founders:
The low capital requirement in Fractional Investing
While, the average minimum capital required to invest in residential property ranges anywhere between Rs. 50-70 lakh (Data from Financial Express, 2021), investing in commercial real estate is typically beyond the reach of a retail investor, generally valued at 25-30 crores.
Even in the case of fractional ownership at present, investments in CRE(Commercial Real Estate) typically start from Rs 15-25 lakhs. (Source: Business Outlook India)
“We knew that real estate transactions are high-value transactions. So initially, we thought of how we could make the ticket size smaller.”
Rajeev Chhabra, Founder & CEO of PropFTX
It might come as a surprise but you can have a fractional ownership with as low as INR 35K on residential properties through our platform. (Check out the minimum threshold here)
(Fractional ownership is an investment where you buy a portion of a high-value asset and acquire rights proportional to your investment value, including rental income and appreciation in property value.)
Our platform divides the property into smaller, purchasable units/tokens, making real estate investment accessible without the need to buy an entire property outright.
This is carried out with the help of Blockchain and AI, which we’ll discuss in detail later in this article. So, stay tuned!
On the other end, offering multiple asset classes such as residential, commercial, and plots, among others also turns out to be a unique value proposition for investors on our platform.
Exceptional Market Liquidity
Another concern in today’s market is the liquidity of purchase and sale. Sometimes, it might take forever to find the right buyer. And even when you’ve found one, closing the transaction may take weeks.
And that’s where tokenization comes into play. Real estate tokenization breaks down a property into digital tokens on a blockchain, that represent a share of the property’s value and associated rights.
(Digital Tokens: Digital representations of ownership or rights, which can be traded, sold, or held as an investment.)
This process aims to make real estate more liquid and simplify the buying and selling process.
It’s like owning a Bitcoin, but here you’re owning a legit physically existing property through a legitimate process under the ambit of rules and regulations.
In this way, PropFTX ensures maximum liquidity through the resale model integrated with Blockchain.
“The platform’s architecture is built to run 24*7 which allows investors to trade at any time of the day, from any location.”
Varun Singhi, Co-Founder & Strategy Head
You can manage the ownership digitally, saving you from all that hassle. That being said, you can obviously make visits to the property as well.
Blockchain solves another major problem:
Robust Security With Blockchain
Blockchain by definition means a digital ledger that is decentralized, distributed, and transparent. Decentralized means it isn’t governed by any central body or stakeholder. It allows transparent information sharing within a business network.
Each operation on the blockchain is safeguarded through cryptographic principles, ensuring data integrity and authentication, and completely avoiding cases of fraud, and money laundering.
“Once we came up with fractionalization, we thought why not integrate blockchain for seamless, transparent, and secure transactions and kill two birds with one stone?” ~ Rajiv
AI-Driven Accuracy in Property Valuation and Forecasts
One of PropFTX’s most important value propositions is the AI model which factors in all the deciding factors such as past rates, location, future projections, etc. to determine the exact rate of the property.
As Rajiv states, “We’re one of the first platforms to give you the best possible price for a particular property. And all of this is possible with our AI model which analyses all aspects of the property to get to the best possible price. The model factors in the last 10 years of data along with future projections.”
With such a robust data-driven model, PropFTX ensures that you’re investing your hard-earned cash into the right assets with profit potential.
It also ensures the integrity, and sanctity of the transaction by stating appropriate rates and bypassing the multiple stakeholders that would otherwise be involved in conventional real estate investments.
When asked how they ensure the legitimacy of the properties listed on the platform, Rajeev says,
“First, we do additional due diligence from our end besides the builders’ legal opinion. And then our AI model steps in and does the rest. Before onboarding a property, we analyze the investment potential and ensure that people coming to our platforms are in for profitable investments.”
Who is PropFTX best suited for?
Upon being asked this question, the three founders mentioned one category each, and we’ll just drop them down here for you:
- Educated youth who want to diversify/broaden their investment portfolio.
- People who want to safeguard their investment through real-time assets.
- And anybody who aspires to become a property owner.
According to the Economic Times, millennials, who make up 36% of the nation’s populace, have significantly influenced various industries within the country. Possessing a collective purchasing capacity exceeding $330 billion, this emerging generation has ventured into the real estate market and is projected to represent 54% of property purchasers in 2023. (Source: Economic Times)
Working professionals in their late 20s and 30s who are willing, even desperate to venture into low-risk and profitable investment domains often get stopped by the high-entry barrier in real estate. PropFTX tackles that problem head-on with its low capital requirement providing a better alternative to the future-deciding youth of Bharat.
Also, people in the 40+ bracket who want a reliable source of passive income, which can also turn into complete property ownership form a major chunk of our investors.
And everyone else in all the categories who is looking to diversify their portfolio and can afford a low-ticket size investment is welcome on our platform.
How does the KYC process work for new investors?
Varun Singhi explains,
“We make sure the person who is getting onboarded is fully verified in terms of their Proof-of-Address, Proof-of-Identity, their selfie verification, and their bank account verification. We also run an anti-money laundering chain against their name across a thousand-plus sanctioned lists across the globe. This entire digital KYC process is robust enough to ensure that the person who is coming on our platform is fully vetted and ready to start trading on our platform. We thoroughly check if the person who is coming to invest is by any chance blacklisted or if they have arrears anywhere else.
We ensure the process is closely aligned with RBI’s guidelines. In addition, the KYC process is speedy.
Conclusion
Despite a few industry challenges including primarily, the lack of awareness about fractional investing in India, it is likely to emerge as a major alternative in the real estate industry, and for solid reasons.
Whether you’re a seasoned investor looking to diversify your portfolio or a newcomer seeking to make your foray into real estate, fractional investing on PropFTX offers a flexible and accessible path.
If you want to get more investment tips and be well-informed about the latest updates and experiences, in short, keep an eye on this industry, head over to PropFTX, and sign up for our newsletter.
And while you’re at it, you can also check some of the properties along with the minimum investment required, on our platform.
