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<keyword id="24068881" type="General" weightage="100" keywordseo="Equity-investments-in-Indian-real-estate" source="keywords">Equity investments in Indian real estate</keyword> may rise 49% to $11 billion this calendar year amid strong demand for properties, according to CII and CBRE. In the 2023 calendar year, the equity investments in real estate stood at $7.4 billion. Industry body CII and real estate consultant CBRE on Wednesday released a joint report titled 'Leading the Charge: Crafting the Skylines of Tomorrow' at the annual CII Realty 2024 conclave. Equity capital inflows touched $8.9 billion between January and September, registering a 46% year-on-year growth. "Overall equity investments in 2024 in the real estate sector are set to hit a new record surpassing $10 billion for the first time," the report said. With a resurgence in investment inflows in built-up office assets and a strong acquisition pipeline for land in the residential sector, the overall equity investments in 2024 would be in the $10-11 billion range. During January-September, institutional and collective vehicle investors accounted for nearly 40% of the overall investments. Developer companies led the total capital inflows with more than 41% share in this period. Domestic investors (predominantly developers) invested nearly USD 6 billion during the first nine months of the calendar year, dominating the overall capital inflows with an almost 65% share. In comparison, foreign investors contributed about $3.1 billion during the same timeframe. Notably, North American and Singaporean investors were the significant contributors, representing about 85% of all foreign capital inflows. Anshuman Magazine, Chairman &amp; CEO, India, South-East Asia, Middle East &amp; Africa, CBRE, said, "Projection for 2024 equity investments between $10-11 billion, highest-ever, underscores continued investor interest in the growing <keyword id="23870227" type="General" weightage="20" keywordseo="real-estate-market-in-India" source="keywords">real estate market in India</keyword>." With SEBI's SM-REIT framework, he said, smaller but high-quality assets in Tier-II markets would also present new avenues for strategic capital deployment. "We believe this regulatory support will add much-needed transparency, enabling a more diversified investment base and encouraging institutional participation across these markets," Magazine said. Going ahead, he said this growing diversification will not only solidify India's real estate sector but also pave the way for future growth across emerging asset classes.

Equity investments in Indian real estate may rise 49% to record $11 billion this year, says CII-CBRE report

<keyword id="19900795" type="General" weightage="20" keywordseo="foreign-investors" source="keywords">Foreign investors</keyword> are currently making a beeline for <keyword id="19894886" type="General" weightage="100" keywordseo="China" source="keywords">China</keyword>, enthused by the gush of <keyword id="23496485" type="General" weightage="20" keywordseo="financial-stimulus" source="keywords">financial stimulus</keyword> injected by the government into the Chinese economy. While this may have temporarily sent their stock markets soaring, a recent report by the <keyword id="19899824" type="General" weightage="20" keywordseo="World-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="World Bank" meta.hostid="261" meta.entityid="World Bank">World Bank</keyword> notes that this might not be enough to push back the <keyword id="19904090" type="General" weightage="20" keywordseo="economic-slowdown" source="keywords">economic slowdown</keyword> that has already set in. China's growth rate is projected to slack further to 4.3% in 2025, down from its present rate of 4.8%. The <keyword id="19916574" type="General" weightage="20" keywordseo="OECD" source="keywords" meta.keywordsubtype="org" meta.entityname="OECD" meta.hostid="261" meta.entityid="OECD">OECD</keyword> also expects the country's growth to slow down to 4.5% in 2025 Experts believe that the recent economic push by the government, which includes lowering reserve requirement ratio (RRR) by 0.5% to 6.6%, lowering mortgage rates, injecting $142 billion into banks, among others, are too little to sustain long-term recovery. Notably, lowering RRR frees up $140 billion for banks to lend, while reducing mortgages and minimum down payments for housing purchases are directed to spur up the Chinese real estate segment. Per <keyword id="19906485" type="General" weightage="20" keywordseo="Goldman-Sachs" source="keywords" meta.keywordsubtype="org" meta.entityname="Goldman Sachs" meta.hostid="261" meta.entityid="Goldman Sachs">Goldman Sachs</keyword>, weak domestic demand, dwindling consumer confidence and spending and an endless real-estate crisis are some of the main reasons for the slowdown.The average Chinese citizen still grapples with job insecurity, stagnant salaries, and depreciating real estate and equity values. For instance, China's last public holiday of the year, the Golden Week, which ended on October 7 and commemorates the nation's founding, saw 2% less spending per domestic trip, as compared to pre-pandemic levels. "Low tourism spending per head and subdued services prices highlight the still weak domestic demand and continued consumption downgrading in the country,” the analysts at GS noted. <h2>Its all temporary</h2>The <keyword id="21360606" type="General" weightage="20" keywordseo="Hang-Seng-index" source="keywords">Hang Seng index</keyword>, which is up by 4.22% today, has been seeing a meteoric rise over the past few weeks. Inching up by a little over 24% over the last month, the Chinese markets have been seeing an significant influx of foreign investment, largely at the expense of other emerging markets like India. Foreign investors had offloaded shares worth Rs 27,142 crore between the first and third of this month, after foreign investments reached a staggering record-high of Rs 93,538 crore in September, as per NSDL data. Over the last 10 days, FIIs have constantly been net sellers, while DIIs have been net buyers. As of October 10th, DII (Domestic Institutional Investors) have put in Rs 50,183 crores in Indian markets, almost balancing out Rs 49,305.29 crore withdrawn by foreign investors. But whether this trend of FII inflow in China continues will largely depend on the fundamentals their economy, an area where India has an edge, thanks to strong confidence of domestic investors. Viram Shah, CEO of Vested Finance highlights that while the Hang Seng index's recent 26% surge over the last month has caught investors' attention, and while this bullish trend is expected to continue, driven by low Chinese stock valuations and hopes for economic improvement from government stimulus, there lies a long road ahead. "Foreign Portfolio Investors (FPIs) pulled out $5.4 billion from Indian equities over five consecutive sessions, ending Monday, October 7. While this suggests a possible rotation of funds from India to China, how long this shift will last will depend on the Chinese government’s ability to resolve the structural economic issues. While the market rally is encouraging, more policy steps are needed to boost economic activity and confidence in China", he added.

All eyes on China: Rush of foreign investors can do little to stave off a slowdown, says World Bank

In Maharashtra’s Thane district, police have registered a case of alleged fraud involving two construction company owners accused of deceiving a family of ₹1.2 crore. The incident came to light after a 28-year-old woman from Thane’s Rabodi area lodged a complaint against the two accused, who are brothers. The accused allegedly persuaded the woman, her mother, and her sister to invest the substantial sum in their construction company based in Mumbai’s Bandra area. Promises were made of a significant payout within five years or, alternatively, the option of acquiring two or three apartments in the city’s prime real estate zone. According to the complaint, the woman’s family entered the deal on December 31, 2022, convinced by assurances of either a return of ₹3 crore over five years or property options in Bandra. To meet the required investment amount, the family borrowed funds from various sources, entrusting their money with the accused based on the lucrative promises. The police official handling the case noted that the family, enticed by the seemingly profitable terms, had not foreseen the outcome that would follow. In May 2023, however, when the family attempted to reclaim their funds and the anticipated profit, the accused allegedly declined the request. The complainant stated that the brothers not only refused to pay but also reportedly threatened the family, citing powerful connections that would shield them from legal repercussions. This behaviour alarmed the family, leading them to seek legal recourse. The Rabodi police have filed a case against the accused under various sections of the Indian Penal Code, including Section 420 for cheating, Section 406 for criminal breach of trust, and Section 506 for criminal intimidation. Additionally, charges were filed under Section 34, indicating common intention, along with relevant provisions of the Maharashtra Protection of Interest of Depositors Act. The case highlights the dangers that investors may face when lured by high-return promises in unregulated sectors. Fraudulent schemes in real estate and construction have been known to target individuals and families looking for profitable investments, often leaving them with financial losses and emotional distress. Authorities are continuing investigations, with the Rabodi police closely monitoring the case to gather further evidence. This incident is expected to bring more attention to regulatory practices within the real estate industry and underscore the need for stricter oversight to protect potential investors from falling prey to deceitful operators. (with PTI inputs)

Thane family loses Rs 1.2 crore as they get cheated by construction company, details here

<ul class="summary-list"><li>The growing ranks of boomers aged 65-plus could spark a boom in the senior housing market.</li><li>Demand for senior housing is expected to surge 50% by 2040, Capital Economics estimated.</li></ul>A big investment opportunity is brewing in one corner of the real estate market, thanks to a wave of <a target="_blank" class="" href="https://www.businessinsider.com/how-retirement-of-peak-boomers-could-affect-economy-social-security-2024-4">baby boomers</a> that are about to age into retirement, according to Capital Economics.The research firm pointed to the so-called "<a target="_blank" class="" href="https://www.businessinsider.com/what-will-happen-baby-boomer-homes-die-millennials-gen-z-2024-1">silver tsunami</a>," the moniker that's been given to describe the imminent surge of Americans over the age of 65 entering prime retirement age. It says this will drive strong demand for <a target="_blank" class="" href="https://www.businessinsider.com/cost-of-a-retirement-home-community-in-every-state-2019-7">senior housing</a> facilities, including assisted living, independent living, skilled nursing, and memory care.For real-estate investors faced with a prolonged slump in the <a target="_blank" class="" href="https://www.businessinsider.com/commercial-real-estate-office-debt-investing-outlook-blackstone-jon-gray-2024-11">commercial real estate</a> space, senior housing offers an enticing alternative, wrote Imogen Pattison, an assistant economist at Capital Economics."With an <a target="_blank" class="" href="https://www.businessinsider.com/baby-boomer-gen-z-millennials-economy-housing-job-market-stocks-2024-2">aging population</a>, senior housing has a clear long run structural demand driver pointing to further growth in the sector. Our analysis shows rent prospects appear strong on the back of undersupply and solid wage growth," Pattison wrote. "That makes senior housing a compelling option for investors looking to break away from traditional property investment."The 65-plus population is on track to grow 30% over the next 16 years, encompassing 80 million Americans by 2040, according to estimates from the US Census Bureau.<div type="image" title="Graph showing number of Americans over age of 65" height="964" width="1396" msid="115427149" hostid="261" sizebytes="21546"></div>Meanwhile, around 11% of those over the age of 65 are currently living in a form of senior housing, according to the American Senior Housing Association. Assuming that percentage holds steady, that implies demand for senior housing will grow 50% over the next 16 years, per Capital Economics' analysis, up from 6 million in 2023 to 9 million in 2040.Rents, meanwhile, are seeing a strong uptrend, thanks to the supply of senior housing growing tighter after the pandemic. The sector posted more than 5% year-per-year rent growth in 2023, nearly double its 20-year average, the firm added.<div type="image" title="Chart showing senior housing rent growth" height="1001" width="1413" msid="115427143" hostid="261" sizebytes="26652"></div>That puts the senior housing sector on track to see average annual returns of 13% for the next four years, the firm estimated. Yearly returns are also set to peak in 2026 at around 16%, it added, more than triple the 4.5% yearly growth expected in 2024."We expect continued tight supply to bolster rents over the next year or so," Pattison added. "Taken together, strong capital value growth and income returns mean the sector looks relatively attractive compared to the other real estate sectors."The <a target="_blank" class="" href="https://www.businessinsider.com/commercial-real-estate-office-outlook-fire-sales-apartment-conversions-housing-2024-10">commercial real estate</a> space has been challenged in recent years, with the demand for offices being weighed down by work-from-home trends while borrowing costs rise in the sector. That means the most troubled office buildings could see a wave of fire sales and conversions, potentially sparking steep losses for property owners, real estate experts told Business Insider.

A 'silver tsunami' of retirement-age baby boomers is creating a big opportunity for real-estate investors, research firm says

<ul class="summary-list"><li>Michael Hyun used creative financing to buy a home amid high mortgage rates in 2023.</li><li>He used a 'subject-to' method, taking over a mortgage with a lower interest rate.</li></ul>In 2022, Michael Hyun was worried about his household's <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/taxes">tax liability</a> as he and his spouse, Eileen, earned a combined $422,000 in income.But they had one advantage: Eileen was a real-estate agent, which qualified her as a real-estate professional under tax law. This provision allowed them to use their properties to reduce taxes by filing jointly and posting their real estate expenses as business expenses. Doing this enabled them to reduce their federal taxes by 99%, including what Hyun owed from his W-2 income. In a previous <a target="_blank" class="" href="https://www.businessinsider.com/how-w2-employee-reduced-federal-taxes-for-tax-refund-issued-2024-2">interview with Business Insider</a>, he explained the process, including how non-real estate professionals could use a similar process.They wanted to continue <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/how-to-invest-in-real-estate-make-money">purchasing property</a> to replicate the tax benefits yearly. However, in 2023, they ran into one problem: <a target="_blank" class="" href="https://www.businessinsider.com/todays-mortgage-rates-friday-8-2024-11">mortgage rates</a> were above 7%, making homeownership unaffordable, even if they rented the house for cash flow.Shopping at different banks and mortgage brokers wouldn't yield much difference in rates. So Hyun tried creative financing, an idea he got after following a YouTuber and real estate investor, Pace Morby. The influencer had a Facebook page where a community of real estate buyers and sellers could connect. There, he found <a target="_blank" class="" href="https://www.businessinsider.com/real-estate-how-wholesaling-works-earn-money-investing-investor-property-2022-11">wholesalers</a>, middlemen that buy property under contract to sell the contracts and transfer the property to the buyer."Wholesalers basically post their deals there. And if you like them, then you'll email the wholesaler, and they will basically get you to buy their contracts," Hyun said. "And when I say contract, I mean basically they already have written an agreement with the seller saying that they will buy the house. And that contract, the wholesalers are selling to me for about $10,000."Hyun used this method to locate a property that could be purchased using what's called "subject-to", when the buyer takes over the property ownership and the mortgage tied to it.In Hyun's instance, It was a fairly new, single-family 3,000 square-foot home built in 2022 in a small town in Texas at a sale price of $475,000. The homeowner was behind on payments. So, instead of going into foreclosure, they sold it to Hyun and transferred the mortgage, which had a balance owed of $368,486 at a 2.75% mortgage rate. For Hyun, this meant a total monthly payment of $2,844, according to records viewed by Business Insider."With a property like this, it would not cashflow if we had gotten the 7% interest rate, meaning the rents would not pay for our mortgage and expenses, and we would be negative every month," Hyun said. "So it just isn't an option unless you get really good financing terms."He paid the seller $16,735 in cash and used carry-back financing for the remainder, which is when the seller finances the gap by accepting monthly payments until the owed amount is reached.Hyun noted that the biggest risk with subject-to is something called the due-on-sale clause, a provision in the mortgage contract that allows the lender to call in the loan if the property title is transferred. The clause isn't commonly enforced, but a lender does have the right to exercise it."What that means is that the mortgage company will basically say you need to pay off the loan immediately, and they'll give you a couple months' notice," Hyun said.Hyun addressed this by working with an attorney to transfer the title to a land Trust or a Living Trust. It requires multiple steps and considerations. However, this is not a required part of the process.

A real-estate investor explains how he got a 2.75% mortgage amid 7% rates

<ul class="summary-list"><li>Mortgage rates stayed high despite rate cuts, attracting cash-heavy investors to the housing market.</li><li>Despite values dropping in some areas, those selling are still raking in gains.</li></ul>Despite the central bank cutting interest rates, mortgage rates haven't followed suit. The average <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/average-mortgage-interest-rate">30-year term remains near 6.21%</a>.Still, there was an uptick in buyers during the second quarter, specifically those who are <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/how-to-invest-in-real-estate-make-money">investors</a>, according to the latest data available from Redfin. The share of investors who purchased property rose 3.4% from a year earlier. They were likely attracted by an opportunity to meet the growing demand of renters who face barriers to homeownership that a lack of affordability and elevated mortgage rates have brought on, read the note by Lily Katz.Home prices nationwide, including those that were <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/how-to-buy-a-foreclosed-home">distressed sales</a>, increased by 4.3% in July from a year ago, according to CoreLogic. An investor purchased one out of every six properties sold within the second quarter and one of every four low-priced homes for a whopping $43 billion worth of real estate, Katz wrote.Investors, which the real estate data firm defines as buyers whose ownership code on a purchasing deed includes either association, corporate trustee, company, joint venture, or corporate trust, are less reliant on debt and are not as rate-sensitive as the average buyer. Most, or 69%, pay in cash or make bigger down payments. It means they can take advantage of the lack of competition.Some of the cities that have seen a rise in investor interest include San Jose, CA, Portland, OR, and Denver, CO. Meanwhile, there has been a drop in purchases in areas like Oakland, CA, and Providence, RI, where median capital gains have plunged by 20% and 37% respectively.The chart below demonstrates the change in investor purchases over the last two decades. It shows upticks following the housing bubble crash and in the years that followed the pandemic.<div type="image" title="Chart demonstrates eb and flow of real estate investor activity." height="834" width="1626" msid="114377796" hostid="261" sizebytes="34338"></div>But whether they're buying or selling, investors have been doing quite well regarding capital gains, says Elijah de la Campa, a senior economist at Redfin. This was not the case in the years leading up to the housing crisis, where property owners were losing from selling."I still see the opportunity for making money on my investments and making a considerable amount of money with 30%, 40% price increases relative to the prior year," de la Campa said. "While things might be more challenging in certain places, overall it looks like there are still lots of opportunities to make money at buying and selling homes as an investor. "He added that even the cities seeing a retreat in their capital gains from a year ago are still profitable at their sale; they're just not going for as much as they would have last June.Below is a list of the 39 major metro areas in descending order of median capital gains over the past year into June. What stands out most to de la Campa is that many areas with the highest capital gains are affordable, particularly Philadelphia and Warren, MI.<table style="minWidth: 50px"></colgroup></colgroup><tbody><tr><td>Region</td><td>Median % Capital Gain YoY (pps)</td></tr><tr><td colspan="1" rowspan="1">Philadelphia, PA</td><td colspan="1" rowspan="1">37.70%</td></tr><tr><td colspan="1" rowspan="1">Warren, MI</td><td colspan="1" rowspan="1">36.80%</td></tr><tr><td colspan="1" rowspan="1">San Jose, CA</td><td colspan="1" rowspan="1">24.50%</td></tr><tr><td colspan="1" rowspan="1">Newark, NJ</td><td colspan="1" rowspan="1">20.80%</td></tr><tr><td colspan="1" rowspan="1">San Francisco, CA</td><td colspan="1" rowspan="1">15.70%</td></tr><tr><td colspan="1" rowspan="1">Detroit, MI</td><td colspan="1" rowspan="1">15.00%</td></tr><tr><td colspan="1" rowspan="1">Baltimore, MD</td><td colspan="1" rowspan="1">6.60%</td></tr><tr><td colspan="1" rowspan="1">Portland, OR</td><td colspan="1" rowspan="1">6.40%</td></tr><tr><td colspan="1" rowspan="1">Anaheim, CA</td><td colspan="1" rowspan="1">5.60%</td></tr><tr><td colspan="1" rowspan="1">Chicago, IL</td><td colspan="1" rowspan="1">4.70%</td></tr><tr><td colspan="1" rowspan="1">Fort Lauderdale, FL</td><td colspan="1" rowspan="1">4.40%</td></tr><tr><td colspan="1" rowspan="1">Los Angeles, CA</td><td colspan="1" rowspan="1">4.30%</td></tr><tr><td colspan="1" rowspan="1">Seattle, WA</td><td colspan="1" rowspan="1">3.70%</td></tr><tr><td colspan="1" rowspan="1">Phoenix, AZ</td><td colspan="1" rowspan="1">-0.30%</td></tr><tr><td colspan="1" rowspan="1">Columbus, OH</td><td colspan="1" rowspan="1">-0.40%</td></tr><tr><td colspan="1" rowspan="1">Milwaukee, WI</td><td colspan="1" rowspan="1">-1.50%</td></tr><tr><td colspan="1" rowspan="1">Las Vegas, NV</td><td colspan="1" rowspan="1">-2.20%</td></tr><tr><td colspan="1" rowspan="1">New Brunswick, NJ</td><td colspan="1" rowspan="1">-3.10%</td></tr><tr><td colspan="1" rowspan="1">Tampa, FL</td><td colspan="1" rowspan="1">-4.00%</td></tr><tr><td colspan="1" rowspan="1">Cleveland, OH</td><td colspan="1" rowspan="1">-5.50%</td></tr><tr><td colspan="1" rowspan="1">Cincinnati, OH</td><td colspan="1" rowspan="1">-6.10%</td></tr><tr><td colspan="1" rowspan="1">Minneapolis, MN</td><td colspan="1" rowspan="1">-6.60%</td></tr><tr><td colspan="1" rowspan="1">Miami, FL</td><td colspan="1" rowspan="1">-7.70%</td></tr><tr><td colspan="1" rowspan="1">Orlando, FL</td><td colspan="1" rowspan="1">-8.60%</td></tr><tr><td colspan="1" rowspan="1">San Diego, CA</td><td colspan="1" rowspan="1">-9.70%</td></tr><tr><td colspan="1" rowspan="1">Sacramento, CA</td><td colspan="1" rowspan="1">-11.50%</td></tr><tr><td colspan="1" rowspan="1">West Palm Beach, FL</td><td colspan="1" rowspan="1">-11.50%</td></tr><tr><td colspan="1" rowspan="1">Atlanta, GA</td><td colspan="1" rowspan="1">-14.80%</td></tr><tr><td colspan="1" rowspan="1">Washington, DC</td><td colspan="1" rowspan="1">-15.00%</td></tr><tr><td colspan="1" rowspan="1">Denver, CO</td><td colspan="1" rowspan="1">-15.30%</td></tr><tr><td colspan="1" rowspan="1">Charlotte, NC</td><td colspan="1" rowspan="1">-16.00%</td></tr><tr><td colspan="1" rowspan="1">Nashville, TN</td><td colspan="1" rowspan="1">-17.90%</td></tr><tr><td colspan="1" rowspan="1">Riverside, CA</td><td colspan="1" rowspan="1">-18.20%</td></tr><tr><td colspan="1" rowspan="1">Jacksonville, FL</td><td colspan="1" rowspan="1">-18.70%</td></tr><tr><td colspan="1" rowspan="1">Oakland, CA</td><td colspan="1" rowspan="1">-20.10%</td></tr><tr><td colspan="1" rowspan="1">Montgomery County, PA</td><td colspan="1" rowspan="1">-26.60%</td></tr><tr><td colspan="1" rowspan="1">Virginia Beach, VA</td><td colspan="1" rowspan="1">-28.40%</td></tr><tr><td colspan="1" rowspan="1">New York, NY</td><td colspan="1" rowspan="1">-29.10%</td></tr><tr><td colspan="1" rowspan="1">Providence, RI</td><td colspan="1" rowspan="1">-37.30%</td></tr></tbody></table>

Investors are piling into real estate as values skyrocket by up to 38%. 13 metros with the highest gains, and 25 that are plunging.

<ul class="summary-list"><li>Investors agree: Short-term rentals are more lucrative but require more time than long-term rentals.</li><li>Some are shifting to offering mid-term rentals, which are typically defined as 30- to 90-day stays.</li></ul>When Business Insider caught up with Amberly Grant in October 2024, she admitted that it had been "a total s--- week and a half."The 36-year-old is <a target="_blank" href="https://www.businessinsider.com/millennial-coast-fire-saved-over-half-her-income-financial-independence-2024-10">on track to retire early</a> thanks to smart investments, including real estate, but her short-term rentals were causing her extra stress at the time of the interview."I had someone trash my unit, steal the TV. I had a cleaner not show up," she told BI. "This week, for whatever reason, is like every five seconds I'm turning around and I'm losing money and having to deal with a problem. And then I could go a whole month and everything's OK and on autopilot. That's the problem with short-term rentals: It just blows up from time to time."Grant puts up with the occasional blow-up because her Airbnb units bring in a lot more money than her long-term rentals. Comparatively, those properties are "simple," said the Colorado-based investor. "You have one person you're dealing with."That's the consensus among real-estate investors: Hosting shorter stays throughout the year is more lucrative than having tenants sign a 12-month lease.Especially with higher interest rates, which increase your monthly mortgage payment, "long-term rentals are just hard," said <a target="_blank" href="https://www.businessinsider.com/real-estate-investing-strategy-how-to-operate-mid-term-rentals-2023-8">seasoned real-estate investor Zeona McIntyre</a>. "In a lot of places with high home prices, and with the higher interest rates, often the mortgage is going to be more than what you could even charge for rent."In her experience, the same property that may produce $200 in cash flow a month from a long-term tenant could earn up to $1,000 a month from tenants doing shorter stays.The trade-off is time and effort. You're managing bookings and multiple guests a month, constantly optimizing your listing, keeping up with local regulations, and coordinating with cleaners.<div type="image" title="amberly grant" height="878" width="814" msid="114592789" hostid="261" sizebytes="64512"></div>Full-time real-estate investor Avery Heilbron categorizes short-term and long-term rentals as "two completely different things."He manages a mixture of both. Two of Heilbron's 14 total units are Airbnbs. He focuses on unique stays — he has a cabin with a fire pit and hot tub, and a tiny home with a sauna — and says he brings in close to $5,000 a month from each."The Airbnb is definitely more work, definitely not what I would consider a passive activity. You're actively thinking about it — how to make it better — and checking pricing and all that stuff, whereas the long-term, you just sign a tenant and might have a couple of maintenance issues or requests throughout the year," he said.It also requires a separate skillet. He considers the short-term rental business "more of a hospitality business than real-estate investing."<h2 id="ce4b9c86-ec50-4ce8-a290-363f0134dcd4">The 'sweet spot' of real-estate investing: Mid-term rentals</h2>Short- and long-term rentals aren't the only options for real-estate investors. There's an in-between — mid-term rentals, which are typically defined as 30- to 90-day stays — and it could offer the best of both worlds: generous cash flow for relatively passive work.McIntyre is convinced that mid-term rentals are the "sweet spot" in real-estate investing.The strategy didn't come on her radar until 2020 when the COVID-19 pandemic hit and sent her Airbnb business into a tailspin."I was ramping up for a busy summer season. Some of my places were booked all the way through May. But when Covid came around in March, Airbnb said, 'We're going to let everyone cancel for free,'" said McIntyre. "I saw one or two cancellations at first, and then it was everything — all of my bookings canceled at once."<div type="image" title="zeona mcintyre" height="864" width="1152" msid="114592793" hostid="261" sizebytes="41374"></div>That's what led her to experiment with mid-term rentals, which she'd heard about through one of her friends who was having success catering specifically to travel nurses.She listed her properties on Furnished Finder, which helps traveling professionals find temporary housing, and was surprised with the result: "I realized there are tons of people looking all the time for longer stays — and longer stays are kind of awesome because people don't need as much from you. They're OK to go buy their own toilet paper and change the batteries because they're living there. It was a whole different vibe from short-term rentals and way less stressful."Today, more than three years after the pandemic hit, "it's my preferred method," said McIntyre, who wrote "<a target="_blank" href="https://affiliate.insider.com?h=371f5fc4fda0515bca1bdc6966e3d3b81bd82f1e2b8fb49b5500260e3c044d7f&amp;postID=671a7818e5b5408300689ea1&amp;postSlug=real-estate-investors-shifting-investing-strategy-offering-mid-term-rentals-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.amazon.com%2F30-Day-Stay-Investors-Mastering-Medium-Term%2Fdp%2F1947200828">30-Day Stay</a>," to help other investors find and operate mid-term rentals. "I want a longer tenant in there, and I don't want to have to think about it for three months."Heilbron is interested in adding some mid-term rentals to his portfolio. He's converting a 750-square-foot detached garage on his primary home's property into a rental that will help offset his current mortgage. He plans to list the garage for "30 plus days stays," he said.Seattle-based investor Peter Keane-Rivera says he's changing his strategy heading into 2025 and "hybridizing" his Airbnb unit, a 70s-themed "<a target="_blank" href="https://www.businessinsider.com/real-estate-investor-setting-up-successful-airbnb-short-term-rental-2023-3">Groovy Guest House</a>," which he's operated as a short-term vacation rental for about two years. He also rents two single-family homes by the room to long-term tenants.<div type="image" title="peter keane rivera" height="3024" width="4032" msid="114592786" hostid="261" sizebytes="1614002"></div>He enjoys the work that goes into managing a short-term rental. "It does allow you to provide a unique service and really to have control over the quality of that service," he said, explaining that he is more interested in offering 30-plus day stays to create more consistent revenue during the slow season."In the summertime, it pulls in a lot — in June and July, I made almost $5,000 on a one-bedroom in the outskirts of Seattle, so I'm fairly satisfied with that — but in the wintertime, there are lower margins," said Keane-Rivera. "I'd rather get something closer to market rent rates, not have to worry about it for four to five months during the slowest seasons, and then spin it back up for spring, summer, and fall to maximize the return."He believes the ability to toggle between short- and mid-term rentals "is a real asset," he said, adding that if he expands to a second Airbnb unit, he'd use the same strategy: "For eight months out of the year I'd run it as an Airbnb and then during the low season, run it as a mid-term rental."

Real-estate investors agree: Short-term rentals bring in more money but cause headaches. Here's the 'sweet spot' some are shifting to.

<ul class="summary-list"><li>The worst is behind the commercial real estate sector, according to Blackstone's Jon Gray.</li><li>The real estate vet thinks there's a huge opportunity for investors in the sector.</li></ul>The worst of the commercial real estate turmoil looks to be over, Blackstone president Jon Gray says.The private equity exec gave a cautiously optimistic outlook on the commercial property market at a recent event hosted by <a target="_blank" href="https://www.goldmansachs.com/insights/goldman-sachs-talks/blackstones-jon-gray-on-real-estate-rates-and-building-a-winning-company-culture">Goldman Sachs</a>. He says the tide may be turning, evident in a handful of signs flashing in the market similar to those that signaled a bottom in 2009, when the commercial real estate sector was beginning to rebound after the Great Financial Crisis."We said in January, publicly on earnings, that we thought commercial real estate was bottoming. And we've continued to believe that," Gray said. "We began to get those signals at the end of last year saying, look, the markets are recognizing inflation coming down. The Fed's starting to tilt toward a different area. As the cost of capital comes down in these sectors, we should go out there and get it."The state of the market mirrors 2009, when activity in the sector was just starting to pick up after the Great Financial Crisis, Gray said."And the problem for investors is they're often looking in the rearview mirror. So they're saying to themselves, 'Real estate, oh, I got all this troubled real estate. And I don't want to go back into that,'" he said. "But if you went back to 2009, the best investments in the cycle were then. You didn't get the all clear sign from everybody else till 2012."Blackstone has been busy "deploying capital" this year, he said, noting that the firm has been scooping up logistics assets in Europe like buildings involved in storing and transporting goods, as well as real estate in Asia."If you were an investor in real estate after the financial crisis, you would have made a lot of money. And my guess is, if you're an investor today, the same thing will happen," he added.

Commercial real estate is flashing signs that the worst of the distress is over, Blackstone president says

Acouple of years into the COVID-19 pandemic, a California state flag appeared on a front porch near my parents' home in suburban Austin. The whole thing felt a little too on the nose, as if one household was trying to sum up all of the city's recent changes — the tidal wave of coastal dwellers, the skyrocketing home values, the maddening traffic — with a single banner.The flag is gone now, and so is the gold rush. Home prices and asking rents in Austin are down significantly from a year ago. Local Zillow listings are littered with price cuts. Real-estate agents who once doubled as bouncers at crowded open houses are now hiring ice-cream trucks to lure prospective buyers into properties.The sudden shift in Austin's real-estate market can be read in two ways. Look at it through one lens, and it's a cautionary tale in which FOMO-filled buyers irrationally bid up home prices, setting the stage for an inevitable bust. Look at it another way, though, and it's a success story of a growing city: Real-estate developers saw all those millennials and out-of-towners clamoring for a piece of Austin and answered the call, building tens of thousands of new homes in just a few years. The construction boom, combined with spiking mortgage rates, kept prices from spiraling further out of control. In other words, Econ 101 happened.This isn't a bust in the traditional sense — pretty much anyone who owned a home in Austin before 2020 is substantially richer today than they were a few years ago. But as other pandemic Zoomtowns continue to see increases in prices and rents, Austin stands alone in its change of fortune. The reversal has meant short-term pain for homebuyers who bought near the peak, <a target="_blank" href="https://www.businessinsider.com/home-sellers-summer-disappointment-mortgage-rates-house-prices-real-estate-2024-5">disappointed sellers</a> who now expect smaller windfalls, and homebuilders who are eager to offload their inventory. But letting some air out of the bubble will turn out to be a great thing for Austin in the long run. The slowdown, experts told me, is a sign of a healthy market, an example of how cities can dodge a true housing crisis by allowing developers to do what they do best: build, build, build.Housing in Austin has been through so many extreme distortions that nobody really knows what "normal" even means anymore. Long before offices shuttered and remote workers started pining for more space, Austin residents were sounding the alarm on the city's rising costs. New construction practically ground to a halt after the financial crisis in 2008, but as the economy recovered, the city's population exploded. No <a target="_blank" href="https://www.businessinsider.com/2020-census-fastest-growing-and-shrinking-metro-areas-2021-8">major metropolitan area in the US grew faster</a> between 2010 and 2020 than Austin, where the number of residents surged by 33% over the decade. Real-estate developers ramped up construction to meet the demand, but they couldn't get enough shovels in the ground to keep prices in check. The median cost of a house in the Austin metro area grew by 63% during that time, Zillow found, reaching $323,000 at the cusp of the COVID-19 crisis.Then the real boom began. To well-paid workers unmoored from their desks during the pandemic, Austin <a target="_blank" href="https://www.businessinsider.com/moved-from-san-francisco-to-texas-for-work-life-balance-2023-8">looked like paradise</a>: lower taxes, cheaper homes, and a thriving business ecosystem. Big-name tech firms like Oracle, Facebook, and Google endorsed the city, as did "<a target="_blank" href="https://www.businessinsider.com/manosphere-widening-ideological-gap-between-young-men-women-gender-genz-2024-2">manosphere</a>" figureheads such as <a target="_blank" href="https://www.businessinsider.com/elon-musk-austin-joe-rogan-biggest-boom-town-50-years-2021-2">Elon Musk</a> and <a target="_blank" href="https://www.businessinsider.com/celebrities-moved-to-texas-from-california-new-york-reasons-why-2024-8">Joe Rogan</a>, who urged others to follow in their footsteps. Austin was once again the <a target="_blank" href="https://www.austinchamber.com/blog/05-09-2023-migration">fastest-growing large metro</a> from 2020 to 2022, according to the Census Bureau, surging in population by 5.3%, or more than 120,000 people.As people flocked to the city, home prices exploded. I don't need to tell you that Austin got really expensive really fast, but the raw numbers are still stunning: The typical home price rose by nearly 56% in just a couple of years, Zillow found, surpassing $500,000 by the start of 2023. Homebuyers <a target="_blank" href="https://www.businessinsider.com/moving-to-austin-buy-a-home-texas-tech-jobs-2023-10">got swept up in bidding wars</a>, reasoning that even if the price ended up being steep, it would only climb higher if they waited. Things got so crazy that one large-scale builder started accepting bids for homes on its website, sight unseen. "That never happens," Keith Hughes, an Austin-based executive at the housing-research firm Zonda, told me. "It was that kind of frothy."I'd already moved out of Texas by that point, but I worried from afar that my hometown would meet the same fate as San Francisco, the poster child of the <a target="_blank" href="https://www.businessinsider.com/economic-inequality-housing-shortage-causes-2023-1">housing shortage and all its associated woes</a>. I feared that Austin would become known as a playground for the rich, a city where displacement and mind-boggling home prices marred the natural beauty that once made it such a draw. In my hand-wringing, though, I'd overlooked one crucial detail: Texas is better at building homes than almost anywhere else in the country.Austin-area builders immediately raced to meet the new demand, securing permits for about <a target="_blank" href="https://fred.stlouisfed.org/series/AUST448BP1FH">2,600 new single-family homes</a> in April 2021 alone, a 45% jump from the same month in 2019. All told, plans for more than 130,000 new housing units of all kinds were approved from 2020 through 2022. Once the paperwork goes through, it can take anywhere from a few months to a couple of years for homes to hit the market, so for a while, it didn't feel like any relief was on the way. That couldn't have been further from the truth.Consider the following trend: In the spring of 2022, more than 3,000 new listings were hitting the market each month, <a target="_blank" href="https://www.parcllabs.com/">Parcl Labs</a>, a real-estate-analytics company, found. By the following spring, the figure had surpassed 5,000. All told, Austin's housing stock has ballooned by more than 76,000 units since 2020, an 8.34% increase that includes single-family homes, condos, and townhomes. That's to say nothing of the <a target="_blank" href="https://www.businessinsider.com/rent-decline-fall-apartment-housing-market-landlords-tenant-lease-construction-2023-3">roughly 40,000 new rental apartments</a> that also opened their doors during that time. Now compare Austin's building blitz with San Francisco, which has added a measly 14,000 homes over the same period and grew its housing stock by less than 1%."It's pretty amazing when you think about it," Jason Lewris, a cofounder of Parcl Labs, told me. Considering the size of the Austin market, moving the stock of homes by nearly 10% is a colossal feat. "These are huge housing markets," Lewris added. "Austin wasn't small in 2019."Thousands of new homes weren't the only things pumping the brakes on Austin's runaway market. Mortgage rates reached record lows during the thick of the pandemic in 2021, making it easy for homebuyers to stretch their budgets by borrowing a lot of money for cheap. Then in spring 2022, the Federal Reserve started hiking interest rates to bring down inflation, and mortgage rates leaped. In October 2023, the rate for a typical home loan hit a 20-year high, making the prospect of <a target="_blank" href="https://www.businessinsider.com/housing-market-mistake-buyers-sellers-mortgage-rates-time-to-buy-2024-3">buying</a> — <a target="_blank" href="https://www.businessinsider.com/denmark-mortgage-rates-lock-in-effect-home-buying-selling-easier-2024-5">or selling, for that matter</a> — a lot less appealing. More expensive loans forced buyers to consider the possibility of paying several hundred dollars more each month for the same home, and many decided to play the waiting game instead. The result is homes are sitting on the market longer. These days, "there's no sense of urgency," Doreen Sidney, a local real-estate agent, told me. "There's no rush. The home that you saw two weeks ago, it'll still be there."The job market cooled as companies pulled back on hiring or laid off workers in the face of higher borrowing rates. Migration to Austin also slowed considerably. Between July 2022 and July 2023, more people moved out of the city's main county than moved in for the first time in two decades. Some departed for the suburbs or cheaper Texas locales like San Antonio — 20% of new San Antonians in 2022 had <a target="_blank" href="https://www.bizjournals.com/austin/news/2023/09/14/austin-sanantonio-migration-data-2023.html">moved from Austin</a>. Others, including some tech workers from places such as California, decided Austin wasn't all it was cracked up to be and moved on. "Austin is where ambition goes to die," one disappointed founder and angel investor <a target="_blank" href="https://www.businessinsider.com/tech-workers-moved-to-austin-regrets-2023-8">told Business Insider</a> last year.There was no shortage of ambition among Austin's homebuilders, however. Their efforts may have been focused on chasing all the profit that comes with a crush of demand, but they ended up doing what hopeful buyers had been praying for — bringing down home prices. The typical home price in Austin was down almost 4% in July compared with the same month in 2023, according to the Freddie Mac House Price Index, while prices across the US were up more than 4%. On the one hand, a single-digit drop like Austin's "is not a huge number," Sean Kelly-Rand, a Boston lender who works with home developers, told me, adding: "On the other hand, that's massive." Overall, Austin home prices are down more than 14% from the peak in 2022, according to Freddie Mac, and more than 18% according to Zillow.Homeowners and -builders don't like to see price drops — they want to watch their wealth balloon and reap the rewards of a market that's running red hot. But just like a collapse in prices is bad news for everyone, an unsustainable run-up in home values is also unhealthy. Companies don't want to move to a place where workers can't afford to live. Wannabe sellers might choose to stay in homes they've outgrown if they can't find anything else within their budget. Add up <a target="_blank" href="https://www.businessinsider.com/san-francisco-doom-loop-fix-american-city-housing-transit-2023-7">all these problems and you get San Francisco</a>. A crash in home prices would've also been bad news for Austin, sure, but that's not what's going on here. The vast majority of homeowners in Austin are still wealthier than they were before all this craziness, and local homebuilders made plenty of hay while the sun was shining. For that reason, Austin's slowdown isn't a doom signal — it's a dazzling success."It's nice to see the positive developments in Austin," Orphe Divounguy, a senior economist at Zillow, told me. "Austin should be a model for the rest of the country in terms of allowing builders to meet demand."Austin's long-standing advantages were on full display during the building boom: Sun Belt cities in the lower half of the US have traditionally been more permissive of growth, which enabled developers to mobilize when they saw the first signs of Austin's unprecedented spike in home values. And most of the new construction was concentrated in the suburbs, where there was plenty of space to build outward. Not all cities have the luxury of ample space, but they do have the power to cut red tape and make it easier to build more types of housing. When developers can get projects approved more quickly, they're more responsive to buyer demand, which prevents prices from getting out of hand. Relaxing the zoning laws, which tell builders what they can and can't build, allows developers to get creative and add multiple housing units to lots that might have traditionally allowed only single-family homes.Nobody watching the Austin market should be having flashbacks to the Great Recession. The market's cooling is less a disturbing sign of cratering demand and more a hopeful hint that the city can adapt to people's desire to call it home."I think Austin is going to be fine in the medium to long run," Jenny Schuetz, a housing-policy expert at the Brookings Institution, told me. "The fundamentals of Austin's economy are great, and it's going to continue to grow with jobs and population over time." In fact, easing the housing crunch will probably add to Austin's allure, which has always been at least partly predicated on being cheaper than the big cities on the coasts. The next challenge will be to avoid forfeiting this success — homebuilding is prone to cycles of booms and busts, and developers are already pulling back on new construction as they try to get their already-built units off their books. Home prices in Austin may be down year over year today, but it's not like there's a glut of empty homes like there was around the country in 2008. If building in Austin dries up, prices may very well resume their rise.Kelly-Rand, the Boston lender, thought about making inroads in Austin a few years ago when the building renaissance was in full swing. But ultimately, he decided not to — buyers' behavior was too frenzied for his taste, and prices seemed likely to come down when all those homes on the horizon actually got built. Nevertheless, Kelly-Rand told me he's still a believer in the Texas capital."Long term, I think Austin will be in an even better position," Kelly-Rand told me. "I think the right thing is happening in that developers are meeting demand."<a target="_blank" rel="" href="https://www.businessinsider.com/author/james-rodriguez">James Rodriguez</a> is a senior reporter on Business Insider's Discourse team.

How Austin's real-estate boom went bust

In a massive relief to those holding legacy, long-time investments in <keyword id="19895040" type="General" weightage="20" keywordseo="Real-Estate" source="keywords">real estate</keyword>, the government today moved an amendment, offering them a choice between the old and new methods of calculating long-term capital gains (<keyword id="6357448" type="General" weightage="20" keywordseo="LTCG" source="Orion">LTCG</keyword>) and paying whichever is the lower of the two as tax. Amidst representations from the real estate sector, and concerns that removing indexation benefits would lead to a surge in black money inflows in the segment, the government proposed the aforementioned changes. Last month, while presenting the Union Budget 2024 on July 23rd, 2024, <keyword id="6355261" type="General" weightage="20" keywordseo="Finance-Minister" source="Orion">finance minister</keyword> <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> had announced doing away with indexation benefit for all asset classes like real estate, gold and more. To soothe the blow, the FM had also lowered the LTCG from its previous rate of 20% to 12.5%. <h2> What was the condition before?</h2>Prior to Union Budget 2024, real estate investments would qualify for LTCG tax, provided they were held for more than 2 years, or 24 months. The LTCG tax payable would be 20%, along with indexation benefit. As the government noted in the <keyword id="123776" type="General" weightage="20" keywordseo="Finance-Bill" source="Orion">finance bill</keyword>, "indexation available under the second proviso to section 48 is proposed to be removed for calculation of any long-term capital gains which is presently available for property, gold, and other unlisted assets. This will ease the computation of capital gains for the taxpayer and the tax administration". Indexation allowed investors to factor in the impact of inflation on their investment over the years, thereby increasing the cost of acquisition, which reduced their capital gains and thus, lowered their overall LTCG tax liability. Here, the government considered the indexed cost of acquisition, rather than the original cost of acquisition, for calculating LTCG. Consider this: Manya purchased a property in FY 2002-03 for Rs 30,00,000. In June 2024 (FY24-25), she decided to sell it for Rs 80,00,000. Now, under the new <keyword id="22692992" type="General" weightage="100" keywordseo="LTCG-Regime" source="keywords">LTCG regime</keyword> (12.5% sans indexation benefit), her tax liability would come down to Rs 6,25,000 (12.5% of 50,00,000). But if she opted for indexation benefits, her indexed cost of acquisition would be calculated using this formula: Cost Inflation Index (CII)value for transfer/sale year/CII for purchase year, or 2001-02 (whichever is later) X cost of acquisition] = 363/105 X 30,00,000= Rs 1,03,71,428 (around Rs 1 crore) (CII values are issued by the government) This is the cost Manya would have to pay, if she were to buy the same property today. But since she sold her house for Rs 80,00,000, she incurred a capital loss of around Rs 20,00,000 and hence, would not have to pay any LTCG tax. Another change that budget announced was that all properties that were purchased prior to 2001 would be grandfathered. This meant that indexation benefits would be applicable to properties which had been purchased prior to 2001. <h2>What changes now? </h2>There are two major changes: 1. Going ahead, investors will have the choice to avail either of the two LTCG regimes-either pay tax on a lower rate of 12.5% (minus indexation), or pay LTCG at the rate of 20%, along with indexation benefit. They will have the freedom to pay taxes per whichever regime which reduces their tax liability. 2. The grandfathering clause, which was earlier set at 2001, will now be considered at 23rd July, 2024. This means that for any property (land or building) that was transferred or sold before July 23rd, 2024, taxpayers will have the option to choose between either of the LTCG regimes, and pay the lower of the two as tax. However, any property that has been sold after July 23rd, 2024 will continue to be taxable exclusively under the new LTCG regime i.e. taxable at 12.5% minus the benefit of indexation. The time period proposed in the budget for an asset to qualify as a <keyword id="22692993" type="General" weightage="20" keywordseo="Long-term-Capital-Asset" source="keywords">long-term capital asset</keyword> i.e. 36 months would also continue to apply. This benefit will only be applicable to real estate i.e. <keyword id="460692" type="General" weightage="20" keywordseo="Immovable-property" source="Orion">immovable property</keyword>. Transfer/sale of other assets such as gold will continue to attract 12.5% LTCG sans indexation benefits.

You Searched For "institutional investors in real estate" and got 10 results

Equity investments in Indian real estate may rise 49% to record $11 billion this year, says CII-CBRE report

PTI

All eyes on China: Rush of foreign investors can do little to stave off a slowdown, says World Bank

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Thane family loses Rs 1.2 crore as they get cheated by construction company, details here

BI India Bureau

A 'silver tsunami' of retirement-age baby boomers is creating a big opportunity for real-estate investors, research firm says

Jennifer Sor

A real-estate investor explains how he got a 2.75% mortgage amid 7% rates

Laila Maidan

Investors are piling into real estate as values skyrocket by up to 38%. 13 metros with the highest gains, and 25 that are plunging.

Laila Maidan

Real-estate investors agree: Short-term rentals bring in more money but cause headaches. Here's the 'sweet spot' some are shifting to.

Kathleen Elkins

Commercial real estate is flashing signs that the worst of the distress is over, Blackstone president says

Jennifer Sor

How Austin's real-estate boom went bust

James Rodriguez

Govt. offers relief on long-term capital gains for real estate, allows investors to choose between old and new LTCG regime

Ira Alok Puranik

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