Where should I invest money in commercial property OR residential property?

Thinking to invest money, whether in commercial property OR residential property.
Resolve it from here… i.e. invest money in commercial property or residential property …

 

In a nutshell:

— Residential segment in real estate industry has been all time favourite for investors till the 2006-07. Return on investment was more than sufficient and capital appreciation was emphasised more than anything else.

— Also, it was much easy to enter in residential segment for investment for the end-user.

— However in the recent years the scenario has changed drastically. Demand for commercial real estate segment is on the upside curve while the residential segment is on the opposite lane, towards downside.

— Let’s delve into the commercial real estate investing segment more and analyse how it is changing the face of the Indian real estate industry.


COMMERCIAL REAL ESTATE INVESTING IN INDIA: AN OVERVIEW


Commercial real estate investing in India is in the limelight simply because of myriad reasons.

Here are the top reasons why most people prefer commercial real estate over residential real estate:

— It is able to get much more returns on investment as compared to the residential segment.

— Nevertheless the investment is, as well, comparatively higher than that in residential segment.

— But at the same time, if investors can leverage funds through financial institutions, they can get through all kinds of entry barriers.

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invest money in commercial property or residential property

Commercial real estate investing has been gaining interest of investors as it is just the beginning of the era when start-ups and corporate sector have been demanding more and more of co-working space.
Whether it is retail, office space or industrial, demand for commercial spaces is expected only to increase.

Why should you invest in commercial real estate than residential real estate?

— Investors have been gaining interest in commercial segment due to the sluggishness in residential segment. There have been issues with the latter due to the lost confidence of the investor or end-user due to the delay in delivery, high rate of interest on loan and less return on investment as compared to that in commercial segment.

— Apparently, investors are more inclined towards the emerging segment. Capital appreciation always goes hand in hand when it comes to investment in real estate besides return on investment. The credibility also goes to simultaneous infrastructural enhancement taking place when it comes to any kind commercial development.

— Investing in commercial space is lucrative not just because it yields high rate of return but also because this kind of space is requirement of almost all commercial undertakings, banks, private firms, HNI’s etc. Moreover, with Real Estate Investment Trust (REIT) in place, the industry will be the field for only serious players.

These above points help out to invest money in commercial property or residential property.

Top investment Tips investing in commercial real estate Revealed

Investing in commercial real estate is highly rewarding. But before you go for commercial real estate investment in India, remember these points.

When investing in commercial real estate, pay attention to overall investment portfolio.


Location:

 

When deciding on how to investing in commercial real estate property in India, location plays a paramount role. There are preferred as well as not-so-preferred micro-markets when it comes to commercial real estate investment in India.
The choice of location depends on various factors such as proximity to key hubs, accessibility, proposed infrastructure developments etc. Emerging micro-markets can be evaluated if existing ones show saturation. This enables commercial real estate investment in India with an eye on long-term capital appreciation.

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Continuous marketability:

 

Robust cash flows due to a good location and building will be but obvious. This means the space needs to be ready for newer tenants and opportunities.
This also means the building needs to show superior technical specifications and in accordance with design and structure as well as green building certifications. Multi-tenanted area areas etc need to be professionally well-maintained. The owner should be able to handle exigencies and must have a corpus fund in this regard.
Additionally, the utilities should be energy efficient and environment- friendly. Management and maintenance need to be paid attention to before signing on the dotted lines when it comes to commercial real estate investment in India.


Market upheavals:

 

Like every other field, a question like how to buy commercial property in India can only be answered by analysing current trends. From specific market performance over a period of years, forecast, rent, to tenant profile and other data, clarity on the financials matter.
It is also important to pay attention to lease contract, especially details such as expiry of the lease, escalations or lock-in period, etc. A well trusted real estate agent should be consulted at all times for an informed decision when considering how to buy commercial property in India.


Documentations:

 

Related documents such as utility bills, planning permit, approvals, taxes should be thoroughly checked as part of due diligence. A tenanted property needs a thorough understanding of the contract, especially lessor’s covenants or obligations.
This would smooth-en out the process with no surprises at a later date. It is also a good practice to check the presence of mortgages secured against the property.


Amenities:

 

Look through the amenities carefully so that they don’t override the cost. Car parking stalls are no longer an amenity. An essential retail space or a food court in a large campus would certainly enhance marketability of the space when looking for commercial real estate investment in India.

Taking into consideration such pointers, a thorough market study should be done with the help of a professional real estate consultant.

Buying Best office space in Noida: A Quick Guide

Investment in buying office space in Noida is seen as a path to quick riches if thought out well and done at the right time. The mantra has been to hold on to property and when the value appreciates, it is sold out. Investment in office space in India can be done without cash for down payment through loans or borrowing money.

After all, buying office space in Noida is a complex task and the investment in commercial property in India depends on how well the investment can be managed.

Here is our guide for you when buying office space for investment:


Developer’s reputation:

Since the transaction involves a lot of money, a good research can help out straighten a lot of things before buying office space for investment. Find out about the reputation of the developer, his track record and ask people around. Pick a developer with at least one successfully delivered project. If the developer is new, then a thorough background check and assessing credit ratings can help.


Earning asset:

Go for assets that have the capability to lease out and generate earnings for you. This can help cover maintenance costs and EMIs. It is necessary to be prudent when buying office space for investment and must invest in commercial property in India that can earn well.


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Environment-friendly:

Go for houses that are high on greens and are environmentally sound. This can help save in the long-term and also help you earn a good name.

Investing in new and upcoming areas: When it comes to investment in commercial property vs residential, Noida and Gurugram top the list as compared to Delhi. There are numerous options of best office spaces in Noida and Gurugram. Not to disregard the developments but go for areas where commercial real estate is high.


Partnerships:

If short of capital, then look for partner/s. But it is important to have a contract which specifies who is responsible for what etc.

Investing in shares or equities: Investors can buy shares in real estate for periodic payments instead of investing a huge amount. However, weigh the pros and cons.

Take into account potential risks before investing in commercial property in India.


Location:

More popular neighbourhoods may become unpopular over time owing to low connectivity, slow infrastructure, etc and the vice versa may also be true. So, it is important to be prepared for such fluctuations when looking for best office space in Noida.


Assets that are liquid:

When market conditions are not good, it is not always easy to sell real estate. Investors who own property for commercial purposes need assets that can be liquid if need be for cash influx into the business.


Cash flow:

It is important to be prepared for issues from tenants or maintenance etc which can hamper cash flow.


Best office space in Noida can be possible if the market conditions and factors mentioned above are taken into account before buying office space in Noida for investment.

Worried about How To Buy Commercial Property In India??

When you need options for investment, commercial real estate property is a lucrative one in country like India. Most of us know about it and thus show great interest. But it is also known that it has many associated risks too. So the investors need to be quite aware of those risks.
That is nearly too impossible when the market is in an ever changing procedure. So naturally the question that comes to our mind: how to buy commercial property in India”?
Absolutely it is natural. So we shared some of the considerations that is essential to consider seriously.

5 tips can actually guide an investor in India to take a step in the best commercial real estate investment.

1. Location:

When buying commercial property for investment, location plays a very vital role. You may find a particular place to be normal today but tat particular place can be a hot cake after few ears after. But that too can depend on the factors like development of transportation, commercial requirements of the value of the place.

Also the case can be vice versa too. The place which is worthy today can get lesser valued after few years. When considering how to buy commercial property in India, location gets the first priority.

2. Diversification:

The commercial property for investment in India need to be diversified to lessen the risks involved. So distribute your eggs at different baskets which can give you positive results when it is required. The risks can come from different sources, but managing then is possible only when you have them at different sectors or places.

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3. Demand and supply:

It is another very important factor to consider in how to buy commercial property in India. Location depends on the demand of the public and also the industry needs the supply too. Both of them should be convenient to reduce the risks involved. So you get to consider these too which can make the task more challenging.

4. The surroundings:

Though this is a factor which can be a very basic one yet it need to be consider with seriousness. Commercial properties for investment need the requirement of the basic utilities which can help to run the business successfully. These may include the supply of electricity, water or even the drainage system. Check them out and then decide the property which you may be interested in buying or taking rent. Don’t ignore this one.

5. Structure of the lease:

When considering how to buy commercial property in India, you must know that property are given on lease too. The commercial properties for investment are often given on lease for may be 99 years or more a rent is taken at a time. So consider the structure of the lease and ll the clauses under it.

Conclusion :

Well, this guide for how to buy commercial property in India is hopefully useful for you. Consider these top 5 factors compulsorily. Ensure that you can prevent the risks as much as you can. Later what comes needed to be overcome.

Recently, RBI cuts Repo Rate, for real estate sector in India, A good sign…!!

A great news for the real estate sector indeed!

The Reserve Bank of India (RBI) has reduced the Repo Rate by 25 basis points, bringing it down from 6.25 percent to 6 percent.

This means the loans are going to be cheaper and real estate sector is going to be more affordable than ever.


The RBI has reduced the key lending rates for the second time consecutively for this quarter. This simply shows the apex bank’s keenness to enhance liquidity in the market and propel growth. The reserve repo rate has been slashed down from 6 percent to 5.75 percent. This means, banks will have more cash available to distribute as loans.


The reduction in repo rate is directly related to reduction in EMIs on home loans. A home loan borrower, for instance, will get a relief of over Rs 500 on a home loan of Rs 30 lakh for a period of 20 years. This means one can expect a benefit of Rs 150-170 per lakh of loan availed of for a tenure of 20 years.


“The commercial real estate sector too will be positively impacted as there will be more liquidity in the market and it will be easier for investors to organise resources for the purchases,” said Ashish Bhutani, CEOBhutani Group, reacting on the development.

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Recently, the Asian Development Bank (ADB) released the GDP growth forecast for India at 7.2 percent, for the current fiscal year 2018-19. However, in order to sustain growth above 7 percent, it is paramount for the banking sector to ensure sufficient liquidity in the market.

The current move from the RBI is very much in line with the growth aspirations of the country.The residential real estate sector in India is too capital intensive.


The real estate and construction sector is the second largest employer in the country, next only to agriculture. If this sector picks up, the whole economy of the country gets benefited. “The commercial real estate sector too picks up in tandem as businesses get better credit environment for expansion,” he added.


Bhutani Group has been enjoying tremendous response for its flagship projects Alphathum and Cyberthum in the Noida Expressway belt. The projects have got investors from across the world and there has been a sustained demand for the properties developed by the Group.