In the dynamic world of real estate investment, breaking down barriers and making opportunities accessible to all has always been a challenge. Claravest, a pioneering platform co-founded by Karan Shetty and Mananki Parulekar, is revolutionizing the landscape by enabling retail investors to partake in real estate investments with a minimal financial commitment. Inspired by their experiences in Silicon Valley and their determination to democratize access to lucrative asset classes, the founders of Claravest are reshaping how people invest in real estate in India. Through a recent exclusive interview, Mananki Parulekar shared insights into the vision, processes, and future plans for Claravest, offering a glimpse into a more inclusive and transparent investment future.
Team Sociobits: What inspired you to start Claravest and enter the real estate investment market?
Mananki Parulekar: Karan Shetty (co-founder of Claravest) and I lived in Silicon Valley, California, for a decade. During this time, we realised we could invest in various assets like stocks, cryptocurrencies, and mutual funds. However, despite our backgrounds in finance and technology, we couldn’t access a lucrative asset class – real estate – due to the substantial financial commitment it required. We explored a few other real estate investment platforms in India that allowed fractional investments and noticed that the individual ticket size for those platforms was typically around Rs. 25 – Rs. 35 lakhs, which is still quite high for retail investors. It was our desire to create a product that would enable non-HNI investors to participate in real estate, and this is how Claravest came to be.
Team Sociobits: Could you elaborate on the specific barriers to entry in real estate investment that Claravest aims to reduce for retail investors?
Mananki Parulekar: Real estate investments require a large amount of upfront capital or require an individual to take up a loan. Along with these monetary challenges, to make a real estate investment any individual has to perform extensive due diligence regarding the property, understand the market potential and run around a lot for operational work (e.g. meeting brokers, identifying lawyers, verifying RERA certificates, etc.). Claravest aims to reduce all these barriers for retail investors.
We allow investors to invest in real estate starting with just Rs. 1 Lakh, we perform the legal due diligence related to all the properties that are onboarded on our platform. We further perform all the operational paperwork. This allows retail investors to invest small amounts of money in multiple real estate properties by sitting on their couches.
We allow investors to invest in real estate starting with just Rs. 1 Lakh, we perform the legal due diligence related to all the properties that are onboarded on our platform.
Mananki Parulekar, Co-founder – Claravest
Note: It is crucial that investors do their own due diligence by asking questions and being aware of the industry.
Team Sociobits: How does Claravest enable retail investors to invest fractionally in properties? Could you explain the process briefly?
Mananki Parulekar: We create a Special Purpose Vehicle (SPV) in the form of a private limited company or LLP (based on the property type) and each SPV will own one property. The sole purpose of that SPV is to buy the specific property, distribute the rental yield generated by the property to the investors and at the end of the investment period, sell the property. Investors who have invested in a property will become the shareholders or partners of the SPV that owns the property.
Team Sociobits: How do you select the properties that are available for fractional investment on Claravest’s platform?
Mananki Parulekar: We are currently focusing on residential real estate. For selecting a property, we look at the below parameters:
- Location: We identify if the property is located in a high-growth market based on any infrastructure development (e.g. development of any train routes, or bridges), or government initiatives (e.g. urban development like airports or tech parks).
- Property Pricing: We only onboard properties where we have received a handsome discount on the property price, this further helps boost property appreciation.
- Property Configuration: We perform a micro market study to identify what type of property configurations can be easily rented out.
- Potential for Property Appreciation: This is one of the key factors we look for, we generally onboard properties in tier-2 cities that are on the path of high growth and where we can enter the market at a cheaper price than the market price.
Team Sociobits: Could you share some success stories or testimonials from investors who have used Claravest? How have they benefited from your platform?
Mananki Parulekar: We launched Claravest in June 2023 and we have two properties that are fully funded. We currently have one property that is open for funding and we have 3 more properties in our pipeline for the next month.
For our first set of investors who funded our first property, we have been able to give them an early payout. We have also been transparent about property details and company details with all our investors and that is something they really like. Our current set of investors like the simplicity and transparency with our communication with them.
Team Sociobits: What are your long-term goals for Claravest? Do you plan to expand into other markets or offer additional services?
Mananki Parulekar: Long-term we foresee Claravest having multiple asset classes like residential, vacation homes, land, etc. Our mission is to make real estate affordable and accessible for all.
Team Sociobits: How does Claravest ensure transparency and security for investors using your platform?
Mananki Parulekar: Once you log on to our website and look at the ‘properties’ section, you will notice that we provide extensive information regarding the property, the location, the developer, and the financial modelling. Once you invest with us we share all the documents like the subscription agreement, the property’s registered sale deed, and any other documents that prove investors rights over the property.
Team Sociobits: What sets Claravest apart from other companies offering similar services in the real estate investment space?
Mananki Parulekar: Very few companies are performing fractional real estate investment in residential real estate. There are a few companies that are fractionalising vacation homes, but we are the only one that is focusing on real estate properties where property appreciation is the key factor.
Team Sociobits: How do you see the future of real estate investment evolving, particularly regarding accessibility for retail investors?
Mananki Parulekar: As per the recent JLL-PropShare Analysis, the Fractional ownership market in India is predicted to grow over 10x to surpass $5 billion by 2030. Fractional real estate investment allows people to access a very rich asset class that was historically only limited to HNIs and UHNIs. Retail investors should take advantage of these opportunities to invest in real estate and diversify their portfolios. Investors should however remember to perform due diligence and educate themselves about the industry before investing.
Claravest stands out in the real estate investment arena by significantly lowering the entry barriers for retail investors and ensuring transparency and security throughout the investment process. With a focus on residential properties and a keen eye on high-growth markets, Claravest is not just making real estate investments more accessible but also more profitable for a wider audience. As the platform continues to grow and diversify its offerings, it holds the promise of transforming the future of real estate investment in India. By enabling retail investors to diversify their portfolios and benefit from property appreciation, Claravest is paving the way for a more inclusive and robust investment ecosystem.
