Managed Farmlands: A new real-estate asset class, by Hosachiguru

1. THE BEST REAL ESTATE INVESTMENT COMPARING DIFFERENT OPTIONS

2. What’s Your View? • The best investment on Earth is Earth! • Buy land. They aren’t making it anymore! • Successful investment is all about managing risk, not avoiding it. • Not all real-estate investments are profitable!

3. Options In Real Estate! Residential Commercial Industrial Farmlands

4. And Their Advantages! Commercial Industrial Residential Farmlands • You can start your own store, perhaps or get handsome rental. • Can help you offset your capital gains tax, easy loans and can become your home. • Build your dream home or commercial outlet the way you like it. • Build your dream farmhouse or grow trees • High appreciation potential: 6-15% per annum and for a long period. • Can appreciate moderately for 15 years @ 2-3%. • Can appreciate moderately for 10 years @ 2-3 % per annum. • Can appreciate well: 6-12 % per annum and can be long. *Conditions apply. • 3-6% per annum passive income. • Passive income depends on one’s ability to mobilise resources to do farming. • Can expect 2-3% per annum in passive income from rentals. • No passive income without infrastructure

5. Insights! Looking deeper into the aspects/benefits of buying these aspects. What can we expect?

6. Your Investment In Real Estate Has 3 Components Land: Appreciates in value depending on locale, future potential, entry price and other factors. Land component of investment Development: Offers passive income but the value of the money invested in this is depreciating in nature Development component of investment The Legal + Brokerage + Stamp Duty: These are your expenditures – Cost of acquiring the asset. Bluntly put it’s sunk in cost. That apart there are a host of other components but not a big component as these. Legal + Brokerage + Stamp Duty

7. Investment Angle - Residential Components of investment – Assuming you're acquiring this for the purpose of investment. Most investments are done in the outskirts where apartments are in the range of Rs.4000 to Rs. 8000 per sq. Ft. Stamp Duty - Expenditures 10% 1. Land – Typically 25% - 30% of your investment goes into land. Assuming land in this area is approx. Rs.3k –8k per sq. Ft., a typical builder builds 3-4 times the floor area. Hence if you pay Rs. 4k per sq.ft. of built up area, you're essentially paying only for 1/3rd of floor area towards land. 2. Development -Typically 50%-60%. Today the cost of construction is between Rs. 2k to Rs. 4k Rs per sq.ft. and constitutes bulk of the investment. Note that value of the construction is NIL in 15 years. People don’t value the construction when they buy a property, just the value of land. Land - Appreciating 30% 3. Brokerage + Legal + Stamp Duty - 10%. This is a sunk in cost and it takes 4 years of appreciation to offset this cost. Margins tend to be higher due to the capital costs involved in setting up of the Infrastructure. 4. Passive Income - 3%-4%. Pretty much offsets your upfront cost on development as that continues to depreciate. However if your house is vacant, you still pay the maintenance and property taxes, an expenditure. Land - Appreciating Development - Depreciating Stamp Duty - Expenditures Development - Depreciating 60% 5. Only 25-30% of your investment is working for you. If you buy this asset on a loan. Rest assured you are enabling a passive income for someone else. Usage of your Money 6. Appreciation is on land only. That is 30% of your investment is appreciating at a rate of 5%-7%.

8. Investment Angle - Commercial Land – Commercial properties are generally brought in prime areas and hence this investment component tends to be slightly higher. This can range between 40-80% in prime areas. Stamp Duty - Expenditures 10% Development - Can range between 10-50% depending on the area but typically lies in the range of Rs. 2000 to Rs. 3000 per sq.ft. This depreciates over a period of 20 to 30 years depending on the location and market shifts. Land - Appreciating 40% Brokerage + Commissions + SD – 10% The costs are similar to that of an apartment. Development - Depreciating 50% Passive Income – Can range from 3% to 6% pre tax and after deduction of property tax, provided you can rent your property at all times. The biggest disadvantage of this asset is that it is too expensive to acquire and buying as a group has liquidation challenges considering most investors today are stuck with group buys - it becomes difficult to mobilise resources from various stakeholders for upgradation or to handle day-to-day affairs. Land - Appreciating Development - Depreciating Stamp Duty - Expenditures Usage of Your Money

9. Commercial Or Residential Plot? We often tend to think that there are no development costs associated with owning a plot. Think again! Any residential or commercial plot is approved by an authority subject to development with Roads, Electricity, Drainages, Compound, Clubhouse requiring a host of permissions for clearance. 
 These costs can often range from 30-60% depending upon the location and area. Ever wondered why a plot in a new layout is priced almost twice the cost of a neighbouring layout developed about 15 years ago? In Bangalore for example, Embassy Springs near the Airport is priced at Rs. 6000 a sq.ft. while most 15 year old developments in that area are priced at Rs. 3000 per sq.ft. Passive Income - Unfortunately is NIL. You may pay up to 1-2% on property tax and annual maintenance. Very rarely do you have an opportunity to get rent from your land. Appreciation potential - On the land, depending on the area, the appreciation potential can be around 6-12%. Margins on sale of developed plots are generally lower than that of apartments and commercial buildings due to lesser infrastructure development.

10. Farmland - Create Your Own Path Hold on, before you make your own path. Let’s understand what it takes to create that path.

11. How easy is to create your own path! Firstly, identifying the right size of land for investment is a challenge. Conducting due diligence for land located in the outskirts of a city/ town is a nightmare at best. The price assessment dynamic could be overwhelming. Anxiety (and apprehension in many cases) of the buyer and seller is the biggest hurdle to closing deals. Securing land without the path can be a nightmare involving - Encroachments, Future Legal Hassles, Cost of Managing, No Immediate Returns and Protection of Capital

12. Is it worth looking at the land just for appreciation? Listen from the real estate experts.

13. Mitigation risks and earning passive income from farmland 1. Invest in land: 70% 2. Set up infrastructure: 5-10% (Fencing + Infra) 3. Grow trees/crops that yield returns: 10% (Generate passive income to offset your spends on maintenance and developments) 4. Other expenditure such as legal+ brokerage or developer margins: 10-15% sunk in as costs.

14. Is It Viable/Possible To Plan Infrastructure And Crops In Just 20% Of The investment? 1. Large are of land can reduce the cost of setup per unit 2. Economies of scale can ensure lower cost of operations 3. Economies of scale can help in acquiring the best resources 4. Large scale farming can avail the best of services at the lowest cost from vendors. Large scale means large investments. Does it mean that I can benefit from farmlands only with large land parcels? Not exactly. With Hosachiguru, you can buy the size of land you wish to and get the advantage of scale. We procure large parcels of land to make it profitable for you! Here's How – Click here https://youtu.be/LT3CEzwjuRc

15. Number Insights Number Insights Land - Appreciating Asset Development - Depriciates over time Stamp Duty - Expenditure 10 10 10 10 15 40 50 60 75 50 40 30 Residential Property Commercial Proerty Developed Plot Manged Farmland If it is not your primary dwelling than its not a good investment High on Capex & large upfront investment. Becomes a big liability if vacant. Good investment if there is a future plan. Else the only resort is to gain from appreciation. Continued expenditure in maintenance and taxes. Good investment, Low on Capex and Opex. Tax efficient. Has multiple benefits.

16. Other Benefits Of Managed Farmlands Ownership With Hosachiguru 2. Plan your weekend / retirement home 1. Create a food forest! Grow your own food 3. Passive income from Timber 6. With Hosachiguru your farm is just a click away – Use the mobile app to monitor your farm 5. No property taxes, No capital gains tax and income tax on crops harvested 4. Expect 8-15% upside on land 8. Easy resale of your plot using our listing tool on the mobile app 7. Hassle free maintenance

17. Think Smart. Think Long Term. Win Big! Investment in land is always profitable. But one has to evaluate and make the right investment in the right time. Historically investment on land in a city’s outskirts delivers better returns than land in the city. And one needs to enter at the right time.   Consider areas like Devanahalli, Bannerghatta Road, Sarjapur Road or Whitefield where farmlands in the 90s were available Rs. 30-40 Rs per sft.  or even lesser. At that time land in Malleshwaram, Majestic, or Basavanagudi was around Rs. 1500 to Rs. 2000 per sft.   In 2020, the cost per sft in the outskirts had grown 100X whereas land in the city grew perhaps only 15-25x at the outer. Of course, there is no point in investing in Devanhalli or Sarjapur at the current prices.   So, it all boils down to one’s ability in identifying those emerging, potential areas and making an investment. Most people did not invest in the outskirts in the 90's due to issues related to distance, titles and security of property.   With Hosachiguru, these issues are addressed completely. Firstly, all our farmlands are in carefully chosen areas, picked for their strategic location and growth potential. Next, we manage the asset and you avail the proceeds from the activity. Of course, the land is bound to appreciate over time – a win-win in more than one way!