In today’s world with there being lots of investors with multiple assets as commercial and residential properties, and with there being lots of individuals providing financial assistance to the needy against real estate properties, there is an industry that is yet to grow in India. For sure this industry is going to take a high boom in the coming years and with less competition today there are a lot of chances for startups to enter this particular industry of real estate management and mortgages.
Some individuals have invested money in real estate and they can’t take care of, or rent all these properties by themselves, and not only individuals we have even corporates in this streamline. This is already a trend in the US and various European nations where particular firms who take care of the properties of these corporates and individuals, the incomes of these firms are a proportion of the rent earned over these properties. These firms are responsible for the leasing of those properties. These firms carry out all the processes from finding a tenant to the cleaning of the properties at the time of vacancy by these tenants. Investors are not even concerned or stressed out of looking how these properties are going to be handled they are just concerned about the money that these firms are going to give them, and with lots of competition already being there in this industry, property holders are on a safer side and have an option to jump to other firms if they are not satisfied with the performance of the current client.
Some people lend money termed as a pawnbroker, they have lots of assets held against properties held by them, and at the same time, they even need to check over the assets held as collateral. But for any individual, there is no possibility of doing these checking on their own, so they hire firms who do these backend work for them and even are looking forward to work on the collection of the EMI and even settle the transaction on behalf of them. There are various firms for these activities in this domain already in the US and European nations with lots of competition existing in that market.
Not that, these individuals or corporates cannot do all these works by themselves, it’s just the thing that this is not their core domain, and it being difficult for them to handle all these works by themselves and hiring people and then managing them and paying them, with times where there is no need of such people would not be cost-efficient, and even a time-consuming process. With having specialized people in this domain individuals or corporates choose to outsource these activities by paying them a portion of the income earned so that they can concentrate on the core activities and utilize their time to work on something more important.
This was the brief of how this industry works and how it is going to earn money, and how these platforms already exist in other nations and the services provided by them and the competition already existing in that market so that individuals or corporates are not cheated, and have options to shift to other clients when they are not comfortable with the performance of the current client.
This industry is new in India, and there is not much competition in this market, we see various individuals and corporates of the real estate and pawnbroking industry managing all these activities by themselves. The reason behind corporates and individuals outsourcing these activities are simple:
- Everyone today wants everything to be going on in a smooth manner and with fewer efforts, they don’t even mind paying for that ease.
- Outsourcing is much more cost-efficient because of specialized individuals being available.
- Core competencies can be explored with such activities being outsourced.
- With no experience of the activities to be performed people tend to choose out individuals who could do these for them.
- People holding huge assets have no clue how to utilize these assets, and how to make money out of them.
In an article I read, it stated that around 1 crore Indians have no idea about the real estate assets held by them. The real estate construction industry utilizes their 50% employees for managing the properties that are not sold out. Most of the individuals owning properties have no clue on the set of activities that are to be carried out before hiring the tenant. Most of the tenants are also not happy with the services provided by their owners. The pawnbroking industry has huge NPA’s with no availability of specialized personnel or has no optimum utilization of resources with incurring huge costs.
There is a transformation in the Indian market that is going to come soon. There are lots of chances for individuals who know how to manage these properties and the backend work that is going to be carried out. People are just going to earn from outsourced activities, and with no huge investments involved. If this transformation is successful it is going to be a trend to hire a real estate management firm or mortgage management firm. There would be lots of chances for further sub outsourcing of specialized activities. There is an industry that is about to grow, and at the start itself it would have huge customers with a huge amount of properties because at first, they are the ones who would want to outsource these activities, and then in long run, such firms would get individuals who have a few or a single property.
The first customers for these startups would be the people who have no idea about the assets held by them, and they wouldn’t mind paying the individuals from the excess money they get from the work done. Then comes the corporates who hold huge investments in real estate and mortgages as they would try to reduce their burden of managing people and properties by outsourcing these activities and concentrating on their core business of constructing new projects and lending more money. Then would be the people who have properties in India, but are settled outside and they would be interested in such firms because they tend to have a guarantee of getting work done with specialized individuals working.