This question of Investment Vs Returns or ROI has come up in multiple groups of Homesteads and it looks like we explain this in detail.
1. What is the investment model with Homesteads.
Ans. Members invest 25 lacs in Buying the land and contracting Homesteads Farmland and Infra Developers to carry out agriculture on it.
2. Returns are less against the investment.
Ans. The project investment has 2 components and ROI also has 2 components.
a) A major chunk of this 25 lacs, around 22.5 lacs goes towards land ownership registered in the member’s name. The net land value appreciation would be the Return on Investment for the land component.
b) A small part of this investment, 2 lacs goes towards farming expense which includes, Borewells to be set up on the land, Drip Irrigation to be set up on the land, Electricity poles & Transformer to be part of the project, 350 trees per acre to be planted in the land apart from other movable and immovable assets. To fairly calculate the ROI, the residual value of all these components and the income from the harvest needs to be taken into consideration.
Members have an option to renew the contract after 5 years or continue to enjoy the farm assets on their own. Farm trees have an expected life of 15 years.
Land ownership and appreciation of Land Value are anyways for the farm owner to enjoy as ROI from the day of registration.
Hope this clarifies the ROI question with Homesteads, kindly feel free to reach us on 965 222 3860 for further queries.