Investing in real estate: How these BITS Pilani graduates are simplifying property ownership

After the initial slump during the pandemic, the equities market has been soaring amid the resurgence. However, equity still might not be a preferred asset class for every retail investor. 

Another sector that saw a downturn due to the nationwide lockdowns in 2020 was the real estate market. However, to revive the sector, banks lowered interest rates on home loans, and factors such as vaccine availability have brought in more home seekers to the forefront. The sector is also expected to grow to Rs 65,000 crore from Rs 12,000 crore in 2019, according to India Brand Equity Foundation.  

Observing the trend, Somil Mathur saw an opportunity to attract investors to one of the most favourable asset classes in India, real estate. 

“We, as a team, are very passionate about real estate. It still seems to be the most sought-after asset class in India. Whenever anyone amasses some chunk of money, they think about buying a property,” says Somil, a computer science graduate from BITS Pilani’s campus in Dubai, in a conversation with YourStory.

Transparent Buying

Somil and his batchmates – Jayant Panwar and Kenish Shah – have created a platform, PropReturns, where people interested in real estate have the option to become owners of pre-leased commercial properties. 

This means, an investor can start making passive income after buying a property as it already has rent-paying tenants.

How PropReturns works

Run by Propreturns Real Estate Technology Pvt Ltd, the Mumbai-based platform was founded in April 2021. The startup runs a platform where it lists commercial properties. Until September 2021, over 2,000 people were using the platform, and it recorded between 15-20 transactions. The start-up did not wish to disclose their revenues as they are in early stages.  

These investments majorly came from high net-worth individuals (HNIs), in their late 20s, and are seeking to earn regular returns from their investments, according to Somil. 

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PropRetuns claims to scout properties through brokers and real estate firms, among other sources, and performs a detailed background check on the venue before listing it on their platform. 

“Real estate is a very opaque market but presents a $4 billion opportunity to invest in India. But the traditional way of investing would entail going to a broker, who would have very local information, and doesn’t even share important details about certain properties. So, someone would have to talk to multiple brokers and that would take about two to three months. We want to bring that time down to five to 10 mins,” says Somil. 

PropReturns has built a tech stack used by the company’s sales team to verify any property leads. About 12 details need to be entered on the platform, with major ones being monthly rental area, lock-in period, details about the tenant, and how old the property is, etc. 

The platform also plans to provide forecasts on rent and property appreciation using historical data, which would be sourced by them through different sources. 

“Before listing any property we provide every information our investors might ask for,” says Somil. 

Initially, the biggest challenge for the firm was to get verified data on the properties they were trying to list.

“When we started, the three of us would just pick up the phone and be on calls trying to confirm details about the property leads we were getting,” says Somil.

After about six months, PropReturns was able to build their proprietary tech infrastructure to automate this process.  

Business model

So far, PropReturns has operated as a bootstrapped startup, with founders putting in their own funds, and backing from Y-Combinator. For their next growth phase, the platform is planning to add a variety of commercial properties catering to high net worth individuals. The startup is also close to raising its seed round. 

At the moment, the lowest amount an individual can invest is Rs 80 lakh, which, Somil admits, could be a high price to pay for many people. But since the platform is catering to HNIs, looking to put their money behind real estate, they would be adding more properties in the coming months.

"Since we are marketplace we want to have more supply so we can cater to the demand and that is our aim before this year ends," says Somil.

The founder claims to be adding more than 15 properties every week on their platform.  

As of now, PropReturns, which operates in Mumbai and Delhi, competes with existing property marketplaces including Magic Bricks, 99Acres and Housing.com. But the founders are confident that their transparency and data-backed property listing platform could attract many buyers.