These are uncertain times for all industries and people are reconsidering their investments.
However, even under these circumstances, real estate is still considered a safe haven by many investors.
Also, the property rates have reached the affordable mark for many and developers are rolling out several deals and discounts which makes it even better to invest in commercial real estate.
So, if you are wondering whether you should invest in commercial property in India, here are a few reasons why your answer should be ‘yes’.
1. Higher Returns on Investment
Multiple times, it has been stated that commercial real estate offers better return on investments than residential real estate.
This is because of its direct connection with the country’s economy. Rising demand for offices, retail spaces and warehouses have always driven the appreciation in the value of commercial properties.
Depending on the location of your property, you can expect year-on-year appreciation anywhere between 3% and 7%.
2. A Source of Regular Income
Commercial properties not only offer better appreciation in the long run, they also give you regular rental returns.
If you have taken the property solely for investment purpose, you should look for the right location and the type of office/retail spaces in demand.
If you choose the right commercial property, the rental returns could help you reach its costs in only a few years.
3. More Organized
With the coming of Real Estate Investment Trusts (REITs) and Real Estate Regulatory Authority (RERA) in India, the real estate market has become a lot more organized.
The affects are seen majorly in the commercial real estate segment.
Previously, people were apprehensive about such investments but now the confidence is developing in the market.
4. Lesser Maintenance Burden
Though there are maintenance costs associated with residential as well as commercial properties, most of it is borne by the tenant in case of commercial ones.
So, despite facing the cost of maintenance, you can pass it on to the tenants and relieve yourself of the burden.
5. Greater Liquidity
Depending on the location of the property, commercial buildings like office spaces and retail spaces enjoy better liquidity.
This is because of the high demand for such properties in areas that have good connectivity and easier access to resources.
On the other hand, residential properties may lie vacant for a long time and even if leased get a lower rental value.
When looking for a commercial investment, location should be the first thing to consider. Do not choose a property just because it is within your budget.
Try to understand the future prospects of the property as well as the location. If a location grows into a business hotspot, you will get tremendous returns.