Assured return is the fixed monthly return given by the developer on the amount paid by investors. This is generally given on under construction commercial project such as space in office, retail and serviced & studio apartments.
At the time of offering this scheme a formal agreement or a MOU (Memorandum of Understanding) between the investors and the developer is implemented wherein the builder assures to give the buyer a fixed amount each month till a fixed period of time. Assured returns are normally given under 3 conditions : (a)Till possession (b)Possession + 3 years (c)Possession + till first lease
Why builder gives such a scheme?
It is becoming more and more hart for developers to get require funds at very reasonable rates of interests. Under this scheme developer gets the sufficient funds at 10% to 15% which is very cheaper than obtaining the loans from banks.
What is in for the investor?
Offers buyers fixed monthly earnings – many real estate developers give bank guarantee hence adding security to the transaction.
Those dealing with assured return project can take dual profits of their investments increasing & simultaneously get returns from day 1 from their investment.
The rate of return works out very high if you factor in the rental income together with growth in basic value of the property.
The basic price of the properties is much lesser compared to other means of investment.
