Real estate becoming the new wealth-building avenue? Moneydhan founder shares emerging investment trend

Time of India

4 hours ago

While most Indian investors chase double-digit gains through mutual funds, a growing segment is quietly building wealth through strategic real estate bets — earning internal rates of return (IRR) as high as 18–22%, according to Sujith SS, founder of Moneydhan.
In a detailed LinkedIn post, Sujith highlighted how India's emerging affluent are increasingly turning to early-stage property investments to outperform traditional assets. 'While
mutual fund investors
cheer a 12% CAGR over a decade, someone like Riya is silently clocking 18–22% IRR by compounding in hard assets,' he wrote, sharing insights from a real client case study.
Check full post here
While mutual fund investors celebrate 12% CAGR over 10 years…
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Riya quietly crosses 18–22% IRR by
compounding hard assets
.
This is how India's new-age rich play the long game. Read more
𝗧𝗵𝗲 𝗚𝗮𝗺𝗲 𝗕𝗲𝗴𝗶𝗻𝘀, 𝗬𝗲𝗮𝗿 𝟬
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A new branded project launches in Gurgaon.
On paper, it's 36 months to possession.
On the ground, it's just a hoarding and a sales office.
But someone, let's call her Riya, books two units. Not one.
Why? ••••
She's buying early due to 𝗽𝗿𝗶𝗰𝗲 𝗲𝗻𝘁𝗿𝘆 𝗱𝗶𝘀𝗰𝗼𝘂𝗻𝘁.
At launch, the flat costs ₹1.2 crore.
Similar "ready to move" flats nearby, are going for ₹1.5 crore.
That's a 20% discount, right from Day 1.
Riya books it with a staggered payment plan:
🔹10 % now
🔹30% 1st milestone
🔹30% 2nd milestone
🔹30% final payment.
No EMI yet. No loan disbursement. Just early commitment.
𝗬𝗲𝗮𝗿 𝟮 ,𝗧𝗵𝗲 𝗕𝘂𝗶𝗹𝗱𝗨𝗽
The tower is halfway up.
The price has inched to ₹1.4 crore.
Demand is growing. NRIs and HNIs enquire with the builder.
Rental brokers want to know, when handover will happen.
Riya watches quietly.
𝗬𝗲𝗮𝗿 𝟯 - 𝗕𝗼𝗼𝗸 𝗽𝗿𝗼𝗳𝗶𝘁𝘀 𝗼𝗿 𝗛𝗼𝗹𝗱?
Possession nears. The builder starts giving keys.
The market value of her flat is now ₹1.75 crore!!
She has two options
🔸Sell the unit and book a clean ₹50 lakh gain after all payments.
🔸Rent it out, earn 6% yield, and refinance against it at cheap rates.
Guess what, She does both.
Sells one, rents the other. ( she has 2 units remember)
Money that came after selling is invested into a pre-leased commercial unit near NH8. That commercial unit starts giving her 8% annual returns from Day 1.
---------
This isn't random investing.This is a structured wealth play.
Over 7–10 years, Riya repeats this process 3–4 times.
Each time
●• Buys early, before the crowd.
●• Waits for value to unlock.
●• Exits smartly or converts to rental income.
●• Moves profits into high-yield commercial assets.
This was the real story for a client we have. He needs us to diversify now into equities and other liquid assets. And before you jump the gun, Read more...
🟧 𝗧𝗵𝗲 𝗟𝗶𝘀𝘁 𝗼𝗳 𝗔𝘀𝘀𝘂𝗺𝗽𝘁𝗶𝗼𝗻𝘀 𝗬𝗼𝘂'𝗿𝗲 𝗕𝗲𝘁𝘁𝗶𝗻𝗴 𝗢𝗻
𝟏. 𝗧𝗶𝗺𝗲𝗹𝘆 𝗱𝗲𝗹𝗶𝘃𝗲𝗿𝘆
If the builder delays, your plan collapses.
𝟐. 𝗠𝗮𝗿𝗸𝗲𝘁 𝗮𝗽𝗽𝗿𝗲𝗰𝗶𝗮𝘁𝗶𝗼𝗻
You're counting on 20–30% growth by possession.
𝟑. 𝗡𝗼 𝗹𝗲𝗴𝗮𝗹 𝗱𝗶𝘀𝗽𝘂𝘁𝗲𝘀
RERA is not as fast or effective as promised.
𝟒. 𝗘𝗻𝗱-𝗯𝘂𝘆𝗲𝗿 𝗱𝗲𝗺𝗮𝗻𝗱
You need someone willing to pay premium for ready units.
𝟓. 𝗖𝗼𝗺𝗺𝗲𝗿𝗰𝗶𝗮𝗹 𝗮𝘀𝘀𝗲𝘁 𝗾𝘂𝗮𝗹𝗶𝘁𝘆
The shift from residance to pre-leased needs due diligence.
🟦 𝗛𝗶𝗱𝗱𝗲𝗻 𝗙𝗿𝗶𝗰𝘁𝗶𝗼𝗻𝘀 𝗬𝗼𝘂'𝗹𝗹 𝗙𝗮𝗰𝗲:
🔹 Bank Loans
You start paying EMIs once disbursement begins, even if the flat is incomplete.
🔹 Registration & Stamp Duty
6–7% of property value reduces net gain.
🔹 Capital Gains Tax
20% with indexation if held over 2 years.
🔹 Rental Vacancies
1–2 months empty can shave off your yield.
How people reacted?
"Intensive capital is the key to invest into a real estate, atleast 10-15 lakhs," said one user.
"As far as I know , some smart players made huge money in the booming Mumbai market , while May lost their shirts and pants in this game , since 2000s. So it is not something new . This was aided by the game of the builder financing your emi ( many ended up paying only emi and possession was a distant dream). There was a tacit support from banks also when disbursements were made not strictly on the basis of the progress of the project , aiding the unscrupulous promoters to divert the money instead of completing the project. My expectation from a responsible advisor like you is that such products are not recommended even with warning. People tend to ignore the warning or may not even understand the same," added another user.