Created by Group 1

Real
Estate
 Table of
Content
• Introduction • Key ratios
• Characteristics • Valuation
• Advantages Methodologies
• Disadvantages • Key reasons to invest
• Benchmarks • Projected ROI
Introduction
Real estate refers to property consisting of
land, buildings, and natural resources
such as minerals, water, and crops. It is a
tangible asset category and includes many
properties, including residential homes,
commercial buildings, industrial facilities,
agricultural land, and undeveloped land.
• Residential Real Estate • Raw Terrain Real Estate
• Commercial Real Estate • Industrial Real Estate
 Characteristics
Economic Attributes Social Attributes
Scarcity: While a substantial portion of the Immobility: While it is possible to move soil and
Earth's surface remains untouched or land, the location of a parcel remains fixed and
unoccupied, the availability of land in a specific unalterable.
area or of a particular quality is typically
restricted Indestructibility: Land is inherently
indestructible and permanent, with its location
Improvements: The act of constructing
remaining constant.
improvements on a piece of land can influence
the value and utilisation of that land. Uniqueness: Each piece of land is distinctive,
The Permanence of Investment: The capital even if some land parcels share similarities or
invested in enhancing a property constitutes a homes have identical designs or layouts. No two
substantial and enduring financial commitment. parcels of land are ever similar.
Location: The location of real estate is the most
critical economic attribute of land.
Advantages & Disadvantages
o Real Estate Offers a Simplified
Investment Experience
o Real Estate Provides Room for
Enhancement
o Real Estate Serves as an
Inflation Buffer
o Real Estate Thrives in an
Inefficient Market
o Real Estate Offers Financing
and Leverage Opportunities
o Real Estate Involves Higher
Transaction Expenses
o Real Estate Exhibits Limited
Liquidity
o Real Estate Demands Ongoing
Management and
Maintenance
o Real Estate Markets Exhibit
Pronounced Inefficiencies
o Real Estate Entails Legal and
Financial Liabilities
Benchmarks

o Nifty Realty Index

o Real Estate Price Indices
o RERA Data
o CREDAI Housing Price Index (CHPI)
o Knight Frank India Reports
o Liases Foras Housing Price Index
 Ratios
o Capitalisation Rate
o Cash-on-Cash Return
o Gross Rent Multiplier
o Net Operating Income Margin
o Debt Service Coverage Ratio
o Return on Investment
o Internal Rate of Return
o Return on Equity
o Price-to-Earnings Ratio
 Valuation
Methodologies
o Sales Comparison Approach
o Cost Approach
o Income Approach
What happens if we include Real
Estate in our Portfolio.
We can invest if we want to reduce the risk, though we would be
getting low returns we are also having low risk.
Thank You
Ayush
Gauri
Kanishka
Rajan
Sanat
Samruddhi