How to make Wealth Investing in Commercial Real Estate

Points for Investing in commercial real estate property for beginners is not as hard as it may sound. Of course, following the long term investment policy will yield you higher returns. In fact, the returns are much more than the most instruments of debt. To make things go smoothly, there are certain considerations needed to be followed.

Take a look at the steps to be adopted for investing in commercial real estate for beginners.


1. Location

Location gets the primary focus. The returns in any commercial property are extracted from two sectors – rent and capital appreciation. Both are largely dependent on the location of your real estate. Always choose those locations that have a vacancy of less than 5%.

This implies that the supply is in control and the tenants are less prone to empty the land. This in turn leads to more rents and higher capital appreciation. The more is the vacancy, the more is the possibility of the tenants to move to other options and renegotiate.


2. Quality

It might happen that there are two buildings in the same location. But the one that promotes a better quality will obviously get the rent first hand.

The better building will attract 4 things at the same time:

1.Quality of tenants
2.Higher capital appreciation
3.Better tenant retention
4.Investor higher rents

The multinational investors are ever ready to a premium amount for the best quality. While investing, check out the certifications of LEED, the platinum or gold ratings, or the buildings that have good facilities like elevator, good looking balconies, high ceilings, and the like.


3. Demand vs supply

Any savvy investor will first analyze this demand vs supply factor before purchasing or investing in a commercial property. Each city has their set of micro markets. If you notice that the annual supply crossed the historical demand within the next 2 or 3 years, know that the prices of the rents are sure to drop down. When there is an unnecessary high supply, both old and the new properties will be affected.


4. Quality of tenant

When there is a good tenant, the value of the commercial property is increased automatically. It is better to fetch for multinational companies than to give entry to unknown or small companies also, it has to be acknowledged that having a good tenant is a boon. They pay the rent on time, pay more deposits, remains for a longer time and lastly, heighten the value of the property automatically.


5. Security deposit

The security deposit for commercial properties differs between 10 and 12 months’ rent. When tenants offer a rent of 6 months or much less than that, be very careful about it. This implies that the tenants are looking forward to a second option or there are some cash issues.


These above major points will help you in investing in commercial real estate property & with great profit…!!

Points to avoid mistakes in commercial real estate investment

Buying a property can be a great investment for you. However, just like in any form of investment, commercial real estate investment mistakes can prevent achieving your goals. We bring you the list of common commercial real estate investment pitfalls you must avoid.


1. Commercial real estate investment in one’s own name:

One of the commonest commercial real estate investment challenge is mentioning one’s own name. Business entity’s name should be mentioned instead of one’s own name. Since commercial properties are high on liability, it is better to avoid being held responsible.


2. Incorrect assessment of space needs:

One of the other most common commercial real estate investment mistake is not providing for expansion. Running out of space means lower productivity which can force a business to move and prove costly for it.


3. Background check on prior uses of the property

This is a must to avoid commercial real estate investment challenges like environmental issues.

Opt for buying a commercial real estate property when the business is new.

Don’t opt for a commercial real estate investment when the business is not ready for a financial investment. Rather than investing in a building, it is better to invest in brick and mortar.


4. Not remembering to take occupancy licenses

Avoiding this commercial real estate investment mistake is a must. Just because a building seems ready, it may not be until all the licenses are ready. Remember to take all such licenses.


5. Checking zoning ordinances

Be thorough with zoning ordinances and current land use in regards to the intended use of the property. Failure to do so may result in violations which may not help with the intended use of the property.

Commercial real estate investment pitfalls of investing in a property that is hard to liquidate

Can be plenty. Why? Circumstances change and financial conditions can also change considerably. So, invest in properties that can be readily liquidated.


6. Choice of location

Analysing the neighbourhood and traffic conditions is essential along with facilities. One of the greatest commercial real estate investment challenge is choosing a good location.


7. Rights vs As Is Clause

Pertinent to know your rights vs As Is Clause. Though the seller may not be required to disclose everything, a buyer needs to know the nuances and can take legal recourse if certain issues about the property haven’t been disclosed.


8. Going by public listings information

Another commercial real estate investment mistake is relying on just public listings information as the only source of information. Since it limits the information, it is better to find a knowledgeable broker who knows information that are not listed publicly.


Time and shopping for commercial real estate loans need to be planned ahead of time for providing for exigencies. Also, don’t let emotions rule the decisions as that can prove costly.

Think ahead of time and not look for short-term stay. It is also important to align business strategy with real estate decisions. Overlooking upfront and ongoing costs can be one of the costliest commercial real estate investment pitfalls.

Aqua Metro Line takes Commercial Real Estate Property in Noida

The Noida Aqua Line is touted to be a much awaited addition to Noida-Greater Noida Expressway belt – a huge advantage for the commercial real estate property in Noida.

The metro rail service is planned to deliver on the demands of daily commuters facing budgetary challenges while commuting to the different sectors covered by said metro line. But, although the metro railway line aims to cover Noida and Greater Noida and a few potentially affordable sectors along the way, it is slated to expand deeper into Greater Noida and the undergoing Airport route.

Ones the line is open :

The metro railway line inaugurated services for the residents from the 26th of January 2019. However, there remain gaps in what should have been the end all, be all of Noida’ residents commuting woes. Residents who live along this metro railway corridor are to enjoy an affordable means of commuting to the aforementioned locations.

Thus, one can even go far as to say that Noida still remains an island in its own right owing to the ever-present budget commuting options; because, a closer look reveals that Noida does not have any direct commuting facility to the Delhi Metro Blue Line or even the Magenta Line which stretches all the way to the airport.

The silver lining beyond the metro line :

Even though the nascent metro rail corridor improves the connectivity by much, it certainly has accomplished enough by lending a hand in the hiking of commercial real estate prices in India. Records depict a lucrative boost to commercial space occupation, bringing the tally to a whopping 3.5 million sq. feet by the end of 2018.

Understandably, business enterprises are trying to make the most of the lucrative asking rates for commercial real estate in Gurugram, along the metro line corridor. Commercial real estate in Noida here goes for as cheap as Rs. 50-70 per sq. feet; adjacent commercial spaces that still enjoy proximity to the metro line are going for as low as Rs.40 per sq. feet. So, it is only evident that consumers absorb commercial assets in the region like hot cakes.

metro connect with commercial real estate property in Noida

Ques. How the metro line benefits commercial real estate property in Noida…??

 

The fabric of commercial real estate property in India owes its marketability to the long term occupants who have bought assets here. What with companies like HCL, Infosys and Samsung setting up large campuses in Noida, more and more business ventures are keen to test the waters.

While there is a short term lack in supply of A grade, ready-made commercial infrastructure to house newcomers, that should not be a long term problem as there is sufficient land to be utilised in Noida. This may also contribute to commercial estate prices remaining at a sub-dollar value for most of the foreseeable future.

Those keeping an eye out for quality commercial office space in the region must take note of the fact that Noida offers quality office space for rental or purchase along the metro corridor. Compared to Noida, the KPOs, BPOs, IT/ITES business in search of affordable, value for money space in Gurugram have to move further away from the railway adjacent plots. Moreover, there has been a slew of prominent businesses filling up Noida’s tech-parks.

Now the only thing left to ponder is how much more potential this region would wield if there was a connectivity between the Aqua and the Blue and Magenta lines.

For more : VISIT : http://www.bhutanigroup.com/