Raj: Saurabh, could you tell us a little bit about yourself?
Saurabh: Hi Raj, I come from 14 years of real estate experience now, I have always been passionate about real estate and excited for owning and managing the real estate. So that has been the interest ever since. I have a mixed background, of hardcore real estate developer where I was working as a developer for seven odd years. Built multiple projects right from residential, commercial, industrial, institutional. Post that, joined no broker at a very early stage as a founding member in 2015.
For about seven years I spent at no broker and started working to derive revenue subscription plans, then eventually monetized our services via home store services or the builder channel which is the primary sales. A management graduate and a lawyer by profession and the idea of Alyf came to me while I was at No Broker itself.
Raj: Saurabh, could you tell us a little more about Alyf’s development experience?
Saurabh: Yeah, Raj. There’s a group known as KGK. They are globally one of the largest when it comes to diamonds. They had a lot of land banks in Jaipur. They were looking for someone who could lead that vertical because within a large corporate, that was a startup in itself.
I took over that project, started a company known as KGK Reality, built few of the largest real estate projects in Jaipur, the largest industrial park, the commercial project largest, and one of the biggest hospitality projects known as Jal Mahal project, which we took it as a public-private partnership project from government of Rajasthan so that it was close to 800,000 crore rupees of turnover projects what we did. With this experience, I understood real estate from grassroot level before obviously became part of the no broker journey, which helped me a lot while building no broker.
Raj: What are the three major things that you learned during this experience?
Saurabh: First, in this industry, you need to be hands on. I think so the first thing which I follow today also. Taking a boardroom decision is one part, but seeing the thing how it gets executed on grassroot level is extremely important.
Second, you cannot ignore legal and finance in India. You need to understand the legal framework pretty well. And you need to be ready for surprises. Your business needs to be ready for surprises. You need to be in that way, very adaptable to various situations.
Third is you need to be a people’s man. You need to understand your team pretty well. You need to empathize with them. You need to work with them. And you need to understand what each one of them gets on table when it comes to their strength areas. So, these would be the three keys. key takeaways for me.
Raj: How did you think about fractional ownership or getting into the holiday homes?
Saurabh: It was very, very organic. While at No Broker, I saw demand for holiday homes increasing. So, you can say the first factor could have been COVID. But then I realized that this is going to be a structural change when it comes to holiday homes. Reason being, I think the one thing which COVID taught us is that you need to value your life, life is short, you need to give time to your friends, family. And unfortunately, Cities like Mumbai, Bangalore, have smaller homes. Obviously, Bangalore is slightly better, but still, you stay in a real estate which is confined to a very smaller area.
I realised people wanted that time off. They wanted to go spend time with their friends, family. Thus, from there, the idea came, and I realised we need to solve for this problem. We need to see, if we can give a holiday home to the Indians who are staying here? And one factual data went a deep dive, was out of some 300 million families who are in India, only 200,000 people own a holiday home, so which is very interesting. More than 99.9% people in India do not own a holiday home. But when I spoke to a lot of people, I understood a lot of them aspire to own a holiday home. But they said, here it doesn’t add value because any good holiday home doesn’t cost us less than, let’s say, a crore or two crore rupees.
So why do I park in a one or two crores when I know I’m going to use it only for 20 to 30 days in a year? so I clearly identified there was a problem in hand. A, there’s a use case where people aspire to own an asset class. Second, they didn’t see value in owning that because the utilization of that asset is lesser. So, then I thought if we can solve for that problem, where we can add value for people, get ownership at a lesser cost, and solve for their limited usage, we are in it for a bigger game and hence the idea of Alyf came in.
Fundamentally two things we are doing at Alyf, one making it commercially accessible by providing that asset at one tenth of the cost. So, a one crore home is available at 10 lakh rupees with Alyf and second, we take care of the property management hassles because if I use it only for 20, 30 days a year, my property is kept vacant. There is a huge operational cost to manage it. Plus, operational hassle as well. So, at ALyf we solve these two problems for all the smart owners whom we have on the platform.
Raj: Besides these two things that you've already mentioned, are there any other things that you're doing differently or how is it then better than traditionally owning a second home because we know a lot of people who have a second home. So, could you just tell us a little more about traditional holiday homes.
Saurabh: There are three, four differentiating factors. One is cost. A traditional home ownership, as I mentioned, starts from a two crore. A new age or a smarter way to own with Alyf, you can own it at, let’s say, 10 lakh rupees. So, you get the asset at a one-tenth cost.
Second thing is, in both the cases, be the traditional way of owning it or the new age of owning it you end up using it only for 20 to 30 days in a year the only thing is you get it at a one-tenth of cost still if you want to park more money you can always buy multiple assets of Alyf at various locations.
Third is the property management. Though you can afford to own let’s say a two-crore property yourself saying I do not need to own at a fraction the problem actually happens is a lot of people who own a holiday home if you go and talk to them, they’ll say, they invest 50% of their time only to get the repair, maintenance, talking to the caretaker and getting the house ready for the stay to come in.
Lot of people actually go a day before to ensure that everything is fine where their guests come in. Then what’s the fun of owning a holiday home? If you need to do all the hassles which you are actually doing at your primary home, at your holiday home itself, the fun factor or the recreation factor is completely out of it. So, at Alyf, we solve for that property management as well.
The fourth problem is exit. If you go and talk to these people who own a holiday home, they’ll say, yeah, we have just bought it and actually we don’t care. That’s the concern. The actual reason is selling a holiday home, considering the larger platforms or the brokers are not active in this market.
With Alyf, we take care of all three things. The entry, the management, which we take care of it. and whenever any of a buyer is looking to sell their share, they come back on Alyf platform itself and we help them find the right buyer. So, entry, usage and exit, everything end to end is taken care by us.
Raj: That's a great value add. But tell us what are you guys charging?
Saurabh: There are three costs attached to all three journeys.
First, when we sell the real estate, we charge the developer or a seller. At Alyf, we charge the seller. We do not charge buyer anything as of now. We want more people to come and enjoy this platform and first get a taste of owning something fractionally when it comes to a holiday home.
Second on the property management part of it, on the rental side of it we charge close to 25% of the rental which we generate from the property. Just to elaborate on the second point, typically the assets are owned by the co-owners but we have an alternative model which allows you to earn rental income when no one is using the property.
And on the third part of it, when we help you sell it at a premium, and only if we help you sell it at a premium, we charge a 10% share in profit. If someone has bought it at 10 lakh rupees, we help him sell at the 12 lakh rupees. The 2-lakh profit which a user has made, we charge 10 of only that 2 lakh, which is 20 000 rupees.
The third factor gives a lot of comfort to the buyers who are buying in today because they know Alyf’s profit also comes in when we help sell them at a premium.
At Alyf, we do not sell a hardware. It’s a mix of hardware and software coming together. It’s the entire essence of property management with experiences which helps the property to genuinely appreciate so if the capital appreciation of real estate is happening by x percentage, we feel with Alyf it is always going to be a delta above x percentage because of the kind of software of the property management service which we offer it to our buyers.
When we’re saying 25% of the rental income, if the property is not rented out, in that case, there are no charges. Although at Alyf we have two models,
One is where it is purely for all owners to use it for themselves. Over there, we charge 10% as a property management fee. So, whatever the cost is there, we charge a 10% as a property management fee.
In a second model, which is suited for people whose primary intent to own this asset class is to generate rental income, over there, we charge 25%.
So, if you will see we cater to both kind of investors who comes on the platform. One investor who wants to buy probably Lonavala second home for their own consumption where we charge 10% of the cost. The second investor who wants to own something in Goa or at Coorg to create rental income for them because they know they won’t be using it for more than, five to six days in a year. Over there, we charge 25% of the rental income which gets generated out of the asset.
Raj: In terms of the profit, share in the profit, you're not considering the total cost?
Saurabh: We are considering the total cost.
Raj: Let's say 10 lakhs is the cost of purchase and you're charging 10% as management fee.
Saurabh: Management fee is different. That is the annual maintenance cost. Asset management fee.
Raj: So, are you also including that in?
Saurabh: Our asset management concept is very different. We only make money on property management when our buyers make rental income out of it. it’s a very standard rental income formula. Let’s say a property generates 10 lakh rupees as a rental income on the gross, I’m talking about the gross income 25% of those 10 lakh rupees comes to us, which is 0.5 lakh rupees.
In that case, the property value would be close to 2 crores. So, for 2 crores we take 2.5 lakh to manage the property. So roughly, if you’ll see optically, up asset management cost is roughly one percent of the property value or the share value.
From the asset management side, our cost roughly is only 1% of the property management fee. For example, somebody who just wants to simply own it and somebody who’s also looking at it from an investment perspective.
Raj: How do you guys ensure that the property prices that are being offered are equivalent or lower than the market value? And is there some kind of benchmarking, in terms of third-party documentation that you guys are offering.
Saurabh: Sure. So, what we do is, as you rightly mentioned, I think for any real estate purchase, it’s very important that customer gets a value for it. If the value is not there, if the right value is not there, long term your business would suffer. We are quite cognizant of that fact. What we do is there are certain benchmarks which we do.
Firstly, we pick the right locality by doing a lot of macro level checks in terms of where the growth potential is higher, where we see rental income, capital appreciation, liveability being there. Now within the locality, we pick a micro locality. So, for example, I’ll give you the best example is Goa.
We identified North Goa is the best locality in terms of all these two, three factors. Within North Goa, let’s say then we identified Calangute, Candolim, these two, places. Being on the coastal region, where the high tourism still persists, these are the great locality when it comes to creating rental income along with capital appreciation.
Post that, the next step what we do is we do two level of benchmarks. So, first benchmark is the replacement theory where we understand the land price, the construction cost, the builder margin and we derive a per square feet cost. Parallelly, we do a competitive mapping which talks about what are the other competitors pricing per square feet being there.
And the third thing what we do is, when we sit on a negotiating table with the developer, we ensure that we are able to purchase at least at a 5 to 8% lesser than the market price. Why a builder agrees to give us the best competitive price? Because we buy it in bulk. So, at Alyf, we do not buy one villa or one apartment. We go ahead and buy the entire project as a whole. a developer also doesn’t mind passing on the best value because he sees that all the six villas are getting sold or all the 25 apartments are getting sold. Thus, the economies of scale come in there and hence we are able to pass on that price to our users who come in. Plus, all our homes are fully furnished.
We ensure that we kind of do the interior to best of the quality in the best time possible and in the best pricing possible. So, the overall cost of the property, and eventually the cost per share is completely under control.
Raj: When you're talking about the developer, how does that dynamic work? Do you do some sort of an agreement with him? You make some sort of a deposit? How does that structure work?
Saurabh: We pay a deposit. We take an agreement to sell with the developer because, we do not want two shops to be out there when it comes to buying and selling. So, we control the entire asset ourselves and the sales team, the marketing team, the pre-sales team, everything is ours.
We do an end-to-end contract. The only thing is we ensure we are working with the right developer there are third-party checks. When it comes to ensuring the right developer, background checks and balances are at place
Raj: Do you guys prefer projects that are just about to be delivered or you're even willing to go much earlier how does that work?
Saurabh: Typically, at ALyf we pick properties which are closer to completion. But soon we might launch a very interesting concept under construction, but still, we are working on it in terms of contract plus how do we secure or safeguard the investors because under construction comes with a lot of checks and balances as we know.
Hence currently all the projects which are on a live platform are either completed or are closer to completion. When I say closer to completion max six months away from possession.
Raj: What percentage of people do you currently see or foresee having to churn their properties and looking for an exit?
Saurabh: Raj, I think for us it’s too early in the day. Majority of people have subscribed in last six months. Plus, they are enjoying their asset. I think so. Whereas, we are positioned bit differently compared to lot of other fractional players in different industry. Lot of other asset classes especially commercial warehousing is more of an investment product. Where for people, it’s an investment value. They might not even see a property.
With us, it’s slightly different. It’s mix of an investment come Alyfstyle product. People, I would say, are still attached to the asset class. I see people on an average would churn out their investment in anywhere between 18 to 24 months in our case.
Raj: If somebody today wants to invest 1 crore, how would you suggest that they invest? Would you suggest that they take multiple properties? What would be the mix? Would it be a 50-50 or 25-25-25-25?
Saurabh: So, it actually depends on the kind of buyer, it’s so obviously there’s no one answer to this question because I’ve seen both kind of buyers. There are people who are very clear. We are only looking at villas here. So, in that case, I would suggest, probably picking two to three villa options with Alyf in various localities. There are few people who are ready to, diversify their investment. Then we might ask them to pick 15 lakhs worth two shares and the balance 70 lakhs into spread across two shares again. So probably a mix of four.
The good thing with Alyf is they’re able to track all their investments, they can book their scheduling, everything through the web apps which we have. Investors are able to see their investments, track their investments, track their scheduling.
Raj: What are the insights or learnings that have happened after you started Alyf, from interacting with customers, the way the journey has been? What are the insights that you've got after starting Alyf because when you start a business as an entrepreneur, you're thinking I’ll tell you right but reality is different. So, what are those insights?
Saurabh: I think fundamentally, we started on a different note altogether. So, we thought of one crore per share would fly and people in India would not look for rental return.
If they get a good lifestyle product, they would be ready to own something at a crore. I think the biggest learning for us is, you need to have options available. Though you have those people who invest a 50 lakh to a crore to own a share, but you also need to have investors with an investment range of 10 to 15 lakhs so that the larger audiences or the larger mass can subscribe or can buy that share and that’s the entire vision of Alyf. Today we want the middle-class public to own this asset class.
We got this hybrid model created, where we said when the owners also do not use the property, we put the property on rental and the rental income starts getting generated. And hence, by virtue of it, we have recently launched our rental platform itself.
All the properties which are sold via Alyf are available on all OTA platforms for a normal user right from an Airbnb to a booking.com to a Make my Trip.
Now we are with our own platform which is known as Stay Alyf. Therefore, Alyf takes care of the buy and sell where you can buy in fractions. And once the property is sold, the properties go live on Stay Alyf where the properties for a normal user on a vacation rental or a two-night, three-night, short term rental basis is available for anyone to enjoy those property. These are the two larger learnings for us.
Raj: Great. So basically, you are owning the entire customer journey right from the time he gets in, he enjoys the property, makes whatever rental income and then even exit. and then reinvesting it. That's a great business model to have.
Saurabh: We want his portfolio of three generations to be managed by us. That’s the entire thing. One thing which is fundamentally very clear, companies like Airbnb and all these vacation rentals are now growing at a 100 to 120% year on year, which clearly depicts one feature, the way Indians enjoy their vacation has changed. They want to stay in a villa, they want to have their own space they want freedom and this is how you and I today go out on vacation in these places. Therefore, obviously now you require supply to cater to this kind of demand and the supply comes or else we create a model like this where co-ownership becomes the new age thing and the people own this asset for rental income or for enjoying this asset with their friends and family
I fundamentally believe we are doing the right thing and this is just the start. We haven’t even scratched the surface when it comes to these holiday home destinations.
Raj: The SEBI regulation is out for fractional ownership. What are your views on that? Will this get considered under the SEBI regulation? What happens if it does? What happens if it doesn't?
Saurabh: All of us are thinking of ways to hire. How do we evolve with SEBI regulations coming in? The good thing is as Alyf we are prepared either way. If SEBI decides key holiday home as a category should not be considered under the gamut of MSME read we are good to go or we’ll keep on building and we’ll keep on doing what we’re doing right now. But at the same time, we have kept ourselves very much prepared. Once these regulations come in, how do we change or evolve the business model in itself?
just to give you one instance, today each apartment is owned under one LLP. Let’s say there are 20 apartments, we have 20 LLPs. If tomorrow SEBI regulations come in, we buy all 20 apartments into one SPV itself, which gets launched as a scheme in the exchange. I think that’s the fundamental point. Other than that, people want to go, to a regulated model rather than non-regulated model, but, our current contracts, our current legal way of working is vetted by the top consultants and lawyers. Once the SEBI regulations come in and what it does to the industry, it takes it to a 20x number, according to me, from where we are today.
Anything and everything that SEBI has regulated, the market then kind of just goes up. Like you’re saying 20x, but it could definitely be 50x or even 100x. The need for holiday homes is very, very high. And if it’s available at a fractional of the cost, it makes a lot of sense.
Raj: You talk about LLP structure. You are a lawyer yourself, so that's great. If you could explain to our viewers LLP versus Private Limited, because most of the other fractional ownership companies use a Private Limited company.
Saurabh: Fundamentally, we checked in terms of what is the essence of creating an SPV into the structure. So, you want, let’s say, eight to ten people to come together or to form an entity. and eventually this entity owns the asset.
The property is getting completely sold out. Now, in our case, the value of these properties is not a 50 or 100 crore. It could be anywhere between 1 to 5 crores. So, in terms of the cost to manage the entity, because buyers, co-owners are jointly paying it. So, we vetted both the models. I did in terms of compliances, costs to manage and what we’re doing with this entity and LLP fits in well. The second point for us was the taxation. when a private limited company, there are double taxation. So once the private limited company gets taxed in its individual books post that when the tag, the profits are distributed again, the tax come on an individual’s taxation in an LLP, it’s just text under LLP.
And then a tax-free income is distributed between all the co-owners so from the taxation optimization perspective, fractional people, as you rightly mentioned, they have a hybrid in terms of NCDs along with this thing there’s a fixed rental so I think so the model is way different for us and LLP suits extremely well so in fractional commercial spaces there is debt component which is why the income is also coming as interest income exactly therefore it kind of lends itself I own something in fraction for the first time I would want to hear that word equity yeah these many shares or equity into the company so I think so that also gives a lot of comfort to our buyers who are coming in because they
the equity into the LLP structure or the shares into the LLP structure. So that’s one. We do two contracts just to elaborate on the legal framework. The first contract is incorporating that LLP where people come and create that LLP structure. Post that that LLP does a sale deed to own the property. And the third contract which happens is there is a property management agreement which happens between Alyf and that LLP to manage the property.
Raj: In the LLP structure, who is the designated partner? It becomes a huge hassle for the property owners who would become the designated partner, etc. So, everything, day-to-day operations are managed by Alyf both on the site or within the property, as well as contract Okay.
And is there any use case where all the investors would have to be, asked for the taken approval of for any decision so obviously there are few decisions, let’s say selling the entire property or asking Alyf to leave the property management part where the consent is required of all eight. So, all those fundamental, or let’s say a big property damage has happened and structural change needs to be done.
So, I think so there are two, three factors which are built into the LLP contract where I would say the consent of all eight all eight partners are required. Otherwise, entire day to do property management is done by the designated partners itself. how does one select a good asset manager? See the background matters according to past background what that asset manager has done.
The kind of properties which that asset management has already launched on their platform. Third very important part is the property management on ground. It cannot be done on an intuitive basis. There needs to be strong sops at place again because this is the service industry what we are talking about. So, Raj, we would want to highlight two major Partnerships, what we have done. So, on the property management side, which makes Alyf as a very strong contender when it comes to the entire asset manager. So, we have partnered with embassy group, those of you are not aware they one of the they are one of the largest developers of the country. They run one of the largest property management companies known as ESPL.
So ESPL manages the entire property on ground for Alyf so when it comes to cleaning, gardening, housekeeping, all those things are managed by embassy Group. So, you’re on the right hand when you’re checking into one of the Alyf property. Second for our signature class, which would be our properties, which would be above 10 to 12 crore assets. Whenever we launch it, which is planned for early next year, we have partnered with Amma Stays.
Raj: If you were in the market to select a property as a buyer or as an investor, what is it that you would look at? There are certain fundamental points which I think works extremely well in real estate.
Saurabh: At a macro level, it’s very important. And I’m considering it’s not for your own consumption. In the first term for your own consumption, there are certain different matrix which one follows. When it comes to our investment, could be anywhere, there are certain different matrix.
First, the objective needs to be clear. Why you are even buying a property? And then you identify the right locality, right micro locality. Then you need to choose the right intermediary. Going via an intermediary, your 70 to 80% problem can be solved if you have the right intermediary. Because the market changes every day. There are a lot of small dynamics which comes into play. And then with that intermediary, you look into the kind of developer which you’re buying in.
Then you check what kind of projects that developer has delivered in past. What are the property management services which are being offered? And who are the people who are actually going to give it on ground?
And the last point is exit. If tomorrow you want to sell, whether that real estate asset class has the potential so that it gets liquidated when you require the fund. So, I think so all these three four points are extremely important while picking or choosing the right property. Okay, and when we refer uh this from a second home perspective how So, does that? Just come to us. Just come to us. Besides coming to you.
Second is a bit tricky because, the intermediary picture gets washed away to a larger extent, unless you’re buying a 10 crore plus asset, then you have a lot of larger intermediaries, IPCs, et cetera, who else you do that.
So, for me, if you’re buying into a holiday home, only hardware doesn’t make a difference. It’s very important that the property management and experiences need to be very, sorted. Right from your pick and drop to your experiences, like your barbecue party, to doing a live singer, to doing anything for your kid’s birthday party. everything is taken care by Alyf.
Choose the right operator because remember, holiday homes you have haven’t bought to own that real estate only. It is also very important to enjoy that asset class and you can only enjoy if you have the right partner to do it. These services, you, I’m assuming you’ve tied up with the right kind of vendors. All you have to do is talk to your team and tell them that this is what we are planning and they’ll organize it.
So, I think so those right partnerships on an aggregation model, it actually stands out for Alyf is what I’ve seen in past people really enjoy these experiences at our properties. So, are there any kind of additional experiences?
Ultimately, as you mentioned, we’re witnessing Airbnb and various other platforms venturing into providing experiences. These platforms enable users to connect with local individuals who offer curated experiences. Users can easily browse and book these experiences.
Raj: Does Alyf also offer any relationship manager services?
Saurabh: On our app, we have a feature in itself, which is known as our on-demand experiences. In fact, there is a relationship manager who gets appointed, who speaks to people. So, our reservation team ensures that those two nights and three nights of your stay are extremely well planned and it’s predictable.
And the good thing is, let’s say you’re sending a guest to your property to enjoy, imagine he’s being pampered all the way. It changes a lot of things for people and I feel life is here to enjoy. With Alyf, we give that asset class along with great software in terms of property management and our team is fully dedicated to that cause. We’re able to get a lot of people employed on that grassroot level. Let’s say, if, Lonavala, you have those Maggie sellers, at tiger Point, etc. We have partnered with few of them.
Travel and tourism are something that’s not going to die down. It’s only going to go up. But with the demand, supply is also going up. So, you see that there is a lot of supply. I’ve been to Goa last summer.
Raj: How do you see the supply side affecting the whole play because end of the day, there is a portion of your clients or investors who are in it for the rental income and also not just enjoying the property.
How do you foresee that playing out?
Saurabh: Raj, to give you a broader perspective, we currently boast approximately 150,000 rooms across hotels, villas, and apartments combined. A comprehensive report by FICCI delves into this extensively. With the development of MOPA Airport and significant government support for MICE businesses, coupled with the trend of weddings gravitating towards Goa, hotel prices have surged by 80%.
According to the aforementioned report, I personally believe that within the next three years, Goa will require close to 300,000 rooms. So, with a supply of high-quality accommodations, finding buyers shouldn’t be an issue. You could even engage in discussions at a café to explore real estate opportunities further.
You’ll see two people raising their hands and saying, we want to own one. So, I think so. The demand is here to stay. I do not want to get into that data of looking at China, what numbers which they do. Enough is spoken on those numbers. Look at us what they do.
In India, real estate ownership has just started. People have now realized it makes a lot of sense to own a real estate property. And one thing which is extremely important, which I would want to highlight with Alyf I know people who have started buying with us as their first real estate investment. They stay at a rental property, but they are saying here at 10 lakh rupees, we cannot own anything anywhere else.
At least we get that opportunity to own a first real estate property with a starting investment of 10 lakh rupees. I think it again gives us a lot of huge validation of what we are building at Alyf.
Raj: Now that you've mentioned that a lot of people are seeking to buy your first property, I'm going to take a step back and ask you again, since you're also into real estate, between buying a home, because the way a lot of people. I've spoken to investors, who say that I want to have my own home, I'm going to have my own office, and then I'm going to look at a second home, right? Now, what are your thoughts? Do you think one should buy a home and then look at other investments like a holiday home? Or do you think it's okay to rent?
Saurabh: With no biasness to Alyf model, I’ll just say our generation above us, my father, probably my grandfather, everyone was very clear about the conventional way of growing in life., you buy a home, you buy a car or probably you buy an office or a shop to yourself and you’re settled in life. It’s very practical., India is a younger audience when it comes to the mindset. Millennials are there. They think everything for them today is an Excel number. So, if you fundamentally look at a primary residential property comes at a 2% cost to you. With an Alyf property or any other holiday home or a commercial attraction, you can make anywhere between 4% to 6% or a 4% to 8% as a rental income.
I’m saying capital appreciation again plays a huge role because if I’m buying something in a Bandra in Bombay, vis-a-vis if I’m buying something, let’s say in a Goa, the capital appreciation chances are way different to both these localities combined. So, this is a practical mindset if I’m okay if I’m not getting under any peer pressure, I would say hands-on buying an alternate real estate asset class today makes a lot of sense rather than owning a primary real estate. It’s a traditional or a conventional mindset. You will see someone owning a first home first. I haven’t bought a first home ever in my life. And my dad questions it, but I’ve invested into a lot of alternate asset classes it be it real estate or other things.
Because the mindset is different in your minds that decides of how you want to invest your funds.
Raj: Should Alyf be considered primarily as an investment product or for end-use?
Saurabh: That’s precisely why we’ve introduced two distinct models. The first model is geared towards investment, while the other caters to self-consumption. This way, we have offerings for both segments. As for the opportunities we foresee in the near future, say within the next year or so, we are exceptionally optimistic. We’ve dedicated considerable effort to bolster our supply chain.
However, ensuring the right quality of supply while adhering to stringent benchmarks posed significant challenges. It took us two to three months to finalize a few successful launches. Recently, we’ve initiated projects worth 100 crores, including two sizable ventures in Goa and one in Alibag. Our outlook for the next 12 months, at the very least, remains bullish regarding this business model. When I mention 12 months, it’s because I believe there’s a scarcity of quality supply nearing completion in the market. Therefore, if the right asset is available on any platform, there will be demand for it.
Regarding whether there’s an international equivalent of what we’re doing, the answer is both yes and no, Raj. Fractional ownership models, akin to what we offer, have existed in the US and UK for quite some time. However, the models differ slightly. Some focus solely on lifestyle properties, such as those valued at four or five million, with a share price of half a million, like places such as Picasso or Kokomo.
Then, there are investment-centric options, where one can invest as low as 200 US dollars. However, due to regulatory constraints in India, we can’t offer investment opportunities starting from a lakh or two. Hence, our model is a blend of both approaches. I always emphasize to our buyers and audience that we’ve crafted a unique hybrid model, considering the Indian consumer mindset. To succeed in India, it’s crucial to comprehend the consumer’s needs thoroughly.
Thus, we’ve evolved and designed a model where individuals can invest as little as 10 lakhs, earning a rental yield of five to six percent, while also enjoying the property and benefiting from capital appreciation. At Alyf, we advocate ownership, enjoyment, and investment – our motto is to own it, enjoy the property, and reap the rewards of ownership.
Raj: Just talking about technology, do you think that tokenization is a possibility? And if so, how and how do you think it's going to impact, the entire customer journey?
Saurabh: I think it’s too early in the day, to be very honest. Tokenization is definitely the future, but could be slightly early. There are already a lot of legal complications in India owning something with unknown people, but with time, That’s the future. There are so many conventional hassles of paperwork otherwise involved.
All those things can only be streamlined when there would be a smart age, newer age or smarter way to do contracting or smarter way to transfer your share, which is only possible with tokenization. But having said that, I think it will be slightly early in the day when it comes to Indian mindset.
Raj: What is your opinion on first time investors in this sort of a format. What are the things that they should keep in mind and what is the ideal kind of investment for them?
Saurabh: This is one of the insights that gradually emerged over time. We learned that there are individuals visiting our platform to purchase their first or second homes. This trend became apparent as we noticed that many of them had been residing in rental accommodations for approximately three to four years, typically in the context of an IT job, with an annual income ranging from 15 to 18 lakhs, or even up to 20 lakhs.
Great validation for us because then it gives them a comfort level that they are going to a structured platform where their hard-earned money is being managed by someone who’s professional. Plus, with that mindset, they get to use a property, they get to make rental income out of that investment, plus the capital appreciation comes to them.
Otherwise, any conventional real estate doesn’t come less than a 50 to 80 lakh rupees beat an apartment itself. So, with Alyf, you get an opportunity to actually own your first second home at an investment of as low as 10 lakh rupees.
Raj: Lastly, if you could tell us briefly about any specific products that are ongoing and the current flavour of the season with Alyf.
Saurabh: I can talk about it all this while. any which ways, I think so two, three wonderful opportunities which are live on the platform. One is a beautiful project known as Prana. we have chosen that project because we got a lot of demand from people who come in North Goa, but they want to stay away from the hustle and bustle.
So, this is in a beautiful, serene location of Sakhur, surrounded by mountains all over. 30 apartments and 10 villas, almost completed. OCA has come, finishes and going on. Next three months, the possession would be given. The investment over there starts at as low as 12 lakh rupees. Our second project is at Candolim, known as Brissa.
The investment starts at 12.5 lakh. So, this caters to buyers who are looking at rental income, want to be closer to the hustle bustle. So, these are the two assets which are live in Goa right now. And then we are doing a beautiful project in Alibaug at an investment of 11 lakh rupees. Typically, Alibaug is known for high-end villas of 8 crores, 10 crores. With Alyf, you can own something in Alibaug as low as 11 lakh rupees.
15 to 20 minutes from Jetty. A beautiful project completed. Fitouts would be done in next 30 days itself. So, these are the three live opportunities which are there between Goa and Alibaug. And then we have a villa opportunity live in Lonavala. This is at Tungaralli, ready to move in villas, fully furnished villas. So, this is the opportunity which is live in Lonavala.
These are the ongoing four opportunities which you can see on a live platform. And all your viewers can take advantage of the same. So, get in touch with us to invest in any of Alyf’s properties and we’ll be happy to guide you and get you the right kind of property. So, with that, Saurabh, thank you so much. Any closing remarks, anything that you’d like to tell our viewers?
On the ending note, I believe real estate presents a promising investment opportunity in India, particularly with the current favourable conditions. Whether through Alyf or other avenues, investing in real estate is prudent. However, it’s essential to adopt a long-term perspective, spanning five to seven years, to maximize wealth creation.
Our extensive experience in the industry has taught us to consider investments holistically, beyond just ROI. We’ve even developed a rating system to evaluate fractional ownership opportunities. We’re committed to enhancing our offerings and welcome feedback to improve further. Thank you for your time, and I look forward to our continued engagement.
