Making an investment is always a risky business and when it comes to real estate it becomes all the more concerning. But this risk can be nullified if the investor is one who has sound knowledge of market, is clear about his requirements and can manage his finances well. Since commercial property isn’t fluctuating much, it’s becoming one of the star attractions of real estate market lately.
We have always believed that commercial property is definitely more rewarding than any residential property. Hence, investing in commercial property vs. residential property holds higher by investors and appears to be more logical too. Points that validate our claims are enumerated below.
- Commercial property are now a day’s reasonably priced, are ready to move in and since the cost of everything is going up considerably, not even real estate is untouched by inflation. New projects come along with increased cost of land as well as construction attached to them giving ready to move in commercial property an edge, over the residential ones.
- When you think of investing in property you often think of return on investment (ROI) in the form of rent. Investment in commercial property would any day provide better rewards in form of higher rentals against an investment in residential property.
- Commercial property comes along with many goody points as real estate developers have come up with many lucrative offers like guaranteed ROI till possession, option to buy back, post possession of property lease guarantee and much more.
If we were to have a bird’s eye view of India’s real estate market; Mumbai, Bangalore, Hyderabad, Gurgaon and Noida can be said to stand out as the commercial properties hub. These locations are flooded with various MNCs and corporate offices often having multiple branches spreading across different cities. Both short as well as long term investment in real estate can be highly rewarding in the years to come.
The consolidation phase of real estate market is beneficial to both kinds of investors; one who are looking for regular income from leasing their commercial property and others who want to save on the rent by using the space for own business. Some featured projects of Noida are: ithum Noida, Imperia Bandhan Wedding Mall and WTC Noida.
Government initiatives like proposal to increase FDI limits, encouragement to building of smart cities and creation of real estate investment trust is increasing the demand and monetary flow into commercial projects.
If we were look at how return on investment is calculated for commercial projects, we will find to ways to do so. First is the rent which is nearly eight to nine percent per annum of the cost of commercial property in addition to appreciation in capital which is ten percent approximately thereby giving fixed return of eighteen to nineteen percent annually.
Going by the statistics Delhi NCR has highest number of under construction projects in India, estimated to be roughly around thirty three percent of the total value. Gurgaon being the most favored of them all amongst commercial property investors. With the commencement of new projects at prime locations of South Delhi, Noida and Gurgaon investors are most likely to be basking in the glory of high returns due to increased profit margins in the years to come.