Frequently Asked Questions
SmartOwner is an online marketplace that enables you to participate in highly curated real estate investment opportunities in the fastest-growing areas of the world.
Real Estate is the largest asset class in the world. It has significant advantages over other asset classes when it comes to providing high-returns in a predictable manner and it is also good at making your portfolio inflation-proof. It combines the security of a physical asset, the advantages of leverage, and the high returns of both yield and asset appreciation, making it an attractive asset class.
We have a team of experts who specialize in various types of real estate investments and they carefully evaluate each opportunity that comes to us. Only about 1% of projects that we evaluate make it through this curation and reach you.
We have opportunities in multiple countries and clients in many countries. The specific opportunity that you will be able to participate in will depend on the location of the real estate opportunity (as some countries have restrictions on ownership) and the regulations with respect to your country and investing abroad. Please visit our opportunities page to understand the eligibility criteria for the opportunity of interest to you.
Each opportunity has its own duration characteristics. In general, you can think of opportunities as either self-liquidating, such as a new development in which properties will be sold to buyers, or as long-term, in which long-term rental income is the goal. With self-liquidating opportunities, we provide the expected duration during which you can expect an exit. For the long-term opportunities that generate rental income, you will be able to list your stake for sale through our site if you choose to liquidate your interest. You will have access to an online control panel, and the SmartOwner Anywhere app, through which project updates, milestones, and performance metrics are regularly communicated so you always know what is happening with your investment and are empowered to take decisions about your portfolio.
Our opportunities are in real estate assets that either generate income or provide a growth-based upside at the end. The returns will depend on the type of opportunity that you invest in and its performance over the succeeding years. While future returns are impossible to predict, over the last few years, SmartOwner's clients who have invested in emerging markets have enjoyed an annualized return of between 16-24%, and we have consistently delivered a return that significantly beats the inflation rate and competing asset classes.
As with any asset, there is inherent risk in any investment. At SmartOwner, we subscribe to the famous quote by Warren Buffett - “Risk comes from not knowing what you’re doing”, and actively seek to mitigate these risks. Our deep domain expertise, backed by our cutting-edge analytics, minimize market risk by careful selection of the markets and opportunities that we bring to you. We have a stringent due diligence process before the property is even selected, as well as a structured, data driven approach to property management once operational, thus minimizing the property risk through professional revenue optimization methods.
We help our clients diversify their portfolios in two ways. First, adding real estate to an asset portfolio is not easy. It requires a lot of expertise and access to information that is typically difficult to obtain and a lot of hands-on management. You get all of this at the click of a button. Second, within real estate, we offer a range of diverse offerings across the world, like a coworking office space in the heart of India’s corporate hub, an ultra-premium residential high-rise in the fastest growing housing market in Asia, and a luxury short term rental portfolio focused on the hottest tourist destinations in the world.
In a REIT or private equity fund, the investor invests in a fund that has fund managers who decide how the capital is deployed. SmartOwner, on the other hand, is a marketplace that connects you with specific investment opportunities in real estate, along with providing a marketplace for you to exit your investment should you choose to do so.
SmartOwner’s fees depend on the specific opportunity. Please visit the opportunities page for the opportunity of interest to you to get the relevant details. Our service agreement for each project also provides particular fee details.
Transparency is one of the key pillars of our service and value proposition. When you become a client, you will receive a private account through which you can access a control panel where details about your investment and the project are regularly updated.
Your receipt (for each payment you make) and your purchase confirmation (once you have fully paid for your investment) will be made available on your control panel. The legal agreement that you execute at the time of your investment will govern the terms of your investment. Additionally, you have complete visibility to your investment through your control panel and our mobile app.
Our investment opportunities have specific minimum investment amounts and, at this time, there is no direct way to invest rental income or profits from one investment into another.
If you are an investor from the United States of America, we check for your Accredited Investor status, without which you will not be able to participate in our offerings. You meet the criteria to be an Accredited Investor if you:
- Earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expect the same for the current year OR
- Have a net worth over $1 million, either alone or together with a spouse (excluding the value of your primary residence)
For more information about whether you qualify, how to get verified, and what documents you can submit as proof, please speak to our asset specialist. This SEC Bulletin is also a useful resource for more information.
SmartOwner's core team is very familiar with the top developers in territories in which we offer deals and we deal only with developers who have a strong track record and reputation for professional conduct. In addition, our deals are carefully structured to ensure that we have appropriate protections before developers get access to client funds.
Real estate development is a high value-add activity where raw land is converted into valuable residential or commercial properties. Developers are able to share a portion of this value add with our clients in return for being able to raise funds through our platform.
While it is impossible to predict future returns as they would depend on future market conditions and the nature of the underlying real estate opportunity, our past early stage real estate transactions that have exited have earned annualized returns ranging from 16% to 24%. Our goal is to offer opportunities that significantly beat the inflation rate and returns from competing asset classes.
The type of insurance depends on the underlying real estate opportunity. For example, developers will have insurance on their construction whereas a rented office building will be insured by the SPV that owns it.
Early stage opportunities are typically self-liquidating. These opportunities are meant to fund the development of a new real estate project which, when completed, will be exited through sales of inventory to end users.
This is specific to each investment and tends to vary based on the type of project, the investment model, and in some cases the size of the development. For instance, some of our residential projects are moderately liquid and allow you to sell your unit on our platform once you have completed a minimum duration ranging from 18-30 months in a project whereas certain other residential projects require a 3 to 5-year project period. Our opportunities page will give you more information about the expected duration of the specific project you are interested in.
This is again specific to each project. In certain projects, no action is required of you for your exit. You will automatically be exited on completion of the project period. In some other projects, if you have completed a minimum period of investment, then you will have the option to initiate resale of your stake through the control panel. All of this can be managed on the go on the SmartOwner Anywhere app as well.
Our remarketing efforts are optimized to market properties within the project duration and are not designed for an immediate liquidation. To make the most of your investments, it would be prudent to plan your commitments considering the entire project period.
People I know have been able to double their money in the last few years. Will I be able to do the same?
SmartOwner is extremely selective in ensuring that the right projects from the right developers at the right price are chosen. The core values of our company are to ensure safety and transparency and to avoid risky or speculative deals. To put it in perspective, the 16-24% annualized returns that our clients have enjoyed in the last few years would be the equivalent of doubling their money in 3-5 years.
Coworking spaces are shared workspaces that offer affordable office space, flexible workspace sizes and timings, and access to top class infrastructural facilities that are inefficiently expensive to independently procure and maintain.
Coworking spaces first became popular among small companies and entrepreneurs who could not compete with large companies for office space. The flexibility offered by these re-imagined workspaces quickly became a godsend for companies that wanted high degree of flexibility and state of the art facilities. Eventually, this trend has expanded to include the entire corporate workforce. Large employers have long been experimenting with productivity improvements through fluid open-plan workspaces like Steve Jobs at Pixar, and co-working spaces have brought with them increased networking opportunities, a much desired collaborative culture, as well as reduced costs.
For investors, coworking spaces can be an excellent investment opportunity. Market demand is booming, and it provides access to a much larger customer base than traditional commercial leases. The median rents are higher than commercial leases on average, and there is a lot of flexibility when it comes to finding lessees and managing the underlying assets. The growth opportunity is quickly being identified by the top funds, and WeWork reaching a valuation of more than $20 billion in just 7 years is a prime example of the prospects for this industry.
There is nothing about the core proposition of coworking that can be called a fad. It is simply the transformation of offices to a business model similar to hospitality where the tenant does not have to manage all the services that make a Grade A office functional. Initially, coworking was associated with open-plans and low privacy, but that is not the case now. They come with private offices and closed off spaces that minimize disturbance and confidentiality risks. The proposition allows a wider tenant base and higher overall rental yield, making this a long term attractive investment backed by a fundamental shift in the way corporate workforces are prioritizing efficiency, productivity, and profitability over traditional ways of working. We see from the market trends that the business model enjoys superior flexibility and returns, and so this phenomenon is likely to pick up a lot of steam with investors in the coming decade. Having said that, each coworking opportunity must be examined on its merits for location, costs, vacancy rates, etc. In other words, although we believe this industry segment has excellent prospects, we believe that traditional commercial property selection criteria must still be applied to it.
Each coworking opportunity will have its own economic model and the income stream will depend on the nature of the underlying transaction. Please review the information pertaining to the coworking opportunity of interest to you to understand how this works better.
While coworking is designed with the idea of flexible office spaces, many large companies find the serviced aspect of these facilities attractive, so it is entirely possible that an office will be leased out to a single large tenant.
We choose the most profitable markets by carefully analyzing rents, vacancy rates, expected supply, absorption growth and other factors in selecting the specific coworking opportunities to offer on our platform.
No, we have a contractual relationship with one of the best-managed and most profitable coworking companies based out of South Asia to offer their opportunities on our platform.
Portfolio Management Services, or PMS, is a client offering where the Portfolio Manager manages the financial securities and funds of the clients, as per the terms mentioned in the PMS agreement.
To start a PMS activity, a body corporate would need to register itself with SEBI as a ‘Portfolio Manager’ under the Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993 or “Portfolio Managers Act”.
A Portfolio Manager enters into a contract or arrangement with the client to offer Portfolio management services, PMS. PMS is then bound by this agreement and accordingly, all the clients’ investments are held only in their own names, and any income or dividend received on the investments are allocated to their respective accounts. PMS agreement covers following aspects - investment preferences, type of instruments and securities allowed or restricted, investment horizon, risks associated with the securities, terms for early withdrawal, termination fees and fee structure of the Portfolio manager, terms of auditing, a note that liability of the client would not exceed his/ her investment portfolio, and the Portfolio manager’s scope of services and their liability, etc. - to ensure that the investments are managed as per the specified terms.
SmartOwner PMS is a Discretionary PMS, which offers attractive and high growth real estate opportunities in Coworking, Residential, Commercial assets.
The following investors are eligible to invest through PMS:
- Resident Individuals
- Hindu Undivided Families (HUF)
- Body Corporates (Private / Public)
- Registered Trusts
- Non-Resident Indians (NRIs)*
- Partnership Firms or any other eligible investors
*Subject to applicable rules
INR 25 lakhs
SmartOwner would accept investments only in the form of cash received through online transfers or bank cheques
The tax liability of PMS investors lies with the investors and would be treated as though the investor is making the investment directly. The Portfolio manager will not be involved in filing taxes and it is recommended that investors consult their tax advisors before filing. However, the Portfolio manager will share a periodic statement of accounts detailing the capital gains and income, to help investors assess their tax liability
Investors may liquidate their investments depending on the characteristics of the underlying securities, and provided the Portfolio value does not go below INR 25 lakhs, and complies with the terms mentioned in the PMS agreement. Accordingly, exit loads will be applicable as specified in the PMS agreement.
Yes, it can be terminated, following which the client can take back the funds or securities from the PMS account, subject to the terms of the PMS agreement.
- Disclosure Document (DD) - DD is provided to the client at least 2 days before the signing of the PMS agreement and every 6 months or on material changes in the details of the DD. The document contains all the details regarding fees, risks, past performance, related party transactions, etc. DD is also filed with SEBI every 6 months or when there are material changes to be reported.
- Portfolio statements - A report containing the composition of the portfolio, transactions undertaken, expenses charged, any beneficial interest received, and risks associated with the portfolio is shared every 6 months.
- Clients will have access to the SmartOwner PMS portal to track the performance of their portfolios.
As per SEBI guidelines on Portfolio Managers act, a Portfolio manager cannot indicate or guarantee returns to clients. However, SmartOwner will be continuously working towards delivering the best possible target returns to investors.
Yes, PAN is a compulsory requirement to invest in PMS.
Additional investments in PMS account may be allowed at the discretion of the Portfolio Manager, subject to available opportunities, and in accordance with the PMS agreement.
SmartOwner PMS offers superior risk-adjusted returns through exclusive opportunities in the fastest growing segments of the real estate market (coworking, commercial, and residential sectors), with investments in highly vetted and curated projects, and in accordance with the terms of PMS agreement. The Portfolio manager, SmartOwner Services India, has deep domain expertise in real estate with highly experienced legal, investment, and project teams, and a proven track record of delivering 24.72% IRR to its clients through its past projects.
To assist clients in their investment decision making process, SmartOwner has made available the following documents:
SmartOwner charges quarterly a fixed base annual management fee of 1.50% on the assets under management, at the beginning of the quarter. All other PMS account expenses such as custodian expenses, audit fees, etc. will be charged only on actuals.
The PMS will target investments in the NCDs of projects in commercial properties, coworking spaces, apartments and gated communities. Each deal will be carefully curated and then thoroughly vetted to maximize the returns for the investors.
The PMS will invest in NCDs with a maturity of 2-5 years, and early redemptions are subject to applicable exit loads as mentioned the PMS agreement.
The Target IRR is 18%.
Underlying NCD will offer an annual coupon of 12%, with 8% being paid out annually and 4% per annum accrued until the final redemption. The investment strategy will be reviewed, updated and communicated periodically with the clients.
4% - if exercised in 1st year, 3% - if exercised in 2nd year, 2% - if exercised in 3rd year, 1% - if exercised in 4th year, and 0% thereafter.
Number and type of securities in a client’s account would typically be determined by the following: quantum of money in client’s PMS account, PMS agreement, opportunities curated and having passed SmartOwner’s rigorous financial, legal, and projects related due diligence checks, and as per the discretion of the Portfolio manager.
Which stage of projects would the investments be made at, what would be the duration of completion of the projects?
Underlying investments for these NCDs would be for projects in Coworking, Residential and Commercial spaces. These investments will be stage-agnostic, but will typically be entered into, after (a) land acquisition and conversion, and (b) all NOCs and development permits have been obtained. Some of these NCDs may also be for completed projects.