Tips for Investing in Commercial Properties

In the contemporary times, as the population of India is increasing rapidly, the demand for commercial properties is also increasing. Commercial properties are properties that are used exclusively for business purposes or to provide a workspace. These commercial properties are leased to tenants to conduct various activities that generate income. Commercial properties includes several categories such as retailers of all kinds, office space, hotels and resorts, restaurants, healthcare facilities and many others. Investing in commercial properties can be profitable and serve as a barrier against the uncertainty of the stock market. Investors can earn money through property appreciation when they sell, but most returns come from tenant rents.

Why investing in commercial properties is better than residential properties?

Nowadays, investing in commercial properties has become the best option for investing, among people, as it yields higher returns. On the other hand, residential properties are bought primarily for end-use as well as long term investment. Commercial properties in the right location attract quality corporate tenants and can, therefore, yield good rental returns over long periods.

“The average rental yield of a commercial property falls in the range of 6% to 10%, whereas, the rental yield of a residential property is low in the range of 1.5% to 3.5 %. Simultaneously, capital appreciation can also be more than satisfactory for the right office assets.”

-Anuj Puri, Chairman, ANAROCK Property Consultants

Investing in commercial properties is not as difficult as it looks like. The tips given below will help you out while investing in commercial properties. Just keep these tips in mind and you are all set to proceed.

  1. Location Research – Location is the key factor to be considered while investing in a commercial property. Any property that is situated in a prime location will guarantee assured returns on your investment. Apart from the infrastructural facilities, you should also research vacancy rates. The lower the vacancy rate, higher are the chances of finding a tenant.
  2. Value Assessment – In order to brag a healthy deal from the tenants, one should evaluate the neighborhood thoroughly. Before investing, gather information on the types of commercial properties in the area, their rental and occupancy rates. This will give a clear idea on how much rent you can charge.
  3. Quality of the Property – In order to retain tenants for a longer time, it is important to invest on properties that have attractive interiors and exteriors, offer good parking space and are close to public places.
  4. Consult Experts – It is always a good idea to take assistance from professionals such as Lawyers, Chartered Accountants, Tax Experts and Real Estate Consultants. This will help you understand the laws and legislations.

Following these steps one can definitely make a wise choice in investing in commercial properties. Do not wait for the right time and choose commercial properties for investment as it is the perfect time. Hurry and grab the property of your choice now!