Looking For Investment Options? Go For Commercial Properties!!
Gone are the days when people used to keep their surplus money in savings accounts and earn interest. Earlier income was limited and people were afraid of taking any kind of risks. Then also the stock market was a preferred choice for investment.
But over the years the scenario has changed. There has been a massive shift in the job and finance sector. Globalization and liberalization have opened up the economy and have allowed foreign companies to operate in our country. This has resulted in the growth of industries and also the income of the people.
People, especially the younger generation, have more income than ever before. They make their financial plans from a very young age. Older people also invest in different segments as they require steady income for their old age. Popular investment choices are stocks, bonds, lands, residential properties, and commercial property in Noida.
Due to recent happenings, stocks and bonds are most volatile. Lands can not yield you a regular income. Residential and commercial properties are good choices for investment. Now the question is which one is the better investment option.
Though both choices give good returns, commercial properties are more lucrative than residential properties.
What Is Commercial Property?
Commercial properties are any properties that generate income and profit. It is not used for residential purposes. Its primarily used for different purposes like office spaces, retail outlets, hotels, etc. Most companies prefer to rent rather than buying commercial properties as it would be more convenient for their business.
Financing, tax treatment, and laws that apply to commercial property are different than residential property.
Also Read – Luxury Residential Projects In Sector-150, Noida
Why Invest In Commercial Property.
Real estate is always been a lucrative option for investment over the years because of its high return. It has high appreciation value.
India has been in limelight in recent years because of its growth and development. Most companies are opening their offices in India because of its quality workforce and huge market.
India has also seen tremendous growth in the startup industry. Because of these growths
the demands for commercial properties are also increasing day by day.
Investment in commercial property has many advantages.
High Return On Investment
Commercial properties give high returns as compared to residential properties. Generally, companies take commercial properties as rent to manage their businesses. Hence, the owner gets the benefit as he receives high rents from the companies.
Whereas residential properties are occupied by families and their rent is much less compared to commercial properties. The annual rental return is 6%-12% in the case of commercial property and 1%-2% in residential property.
Stable And Long Run Income
Investment in commercial properties gives you a stable income for a longer period. Commercial lease agreements are generally for the long term, as businesses don’t want to change places frequently. There is also an annual increase provision in the agreement which greatly benefits the owner and gives good returns throughout the year.
Hassle-Free Management
Dealing with tenants is a cumbersome process and takes a lot of time and effort. In the case of residential properties, one needs to constantly check on tenants to keep the flow of rent coming. Managing tenants is a hassle as frequently one has to deal with new tenants.
As commercial tenants are for the long term, one doesn’t need to worry much. Commercial spaces are rented to businesses, hence they manage everything professionally. This space adds value to their business, hence they keep the property well maintained.
The owner can sign a triple-net lease (NNN) agreement with the tenant which benefits the owner as the tenant is responsible for rent and bear the majority of expenses.
Less Furnishing Expenses
In most cases, the owner gives a furnished house to the tenants as it fetched good rent. Every rented commercial space is the face of any business. Hence they furnished the space according to their taste and requirement. So for the commercial property, the owner does not worry about furnishing and can offer the naked space to the tenant.
Higher Value In Future
Commercial spaces are generally built in places where good infrastructure and communication exist. The area in and around the place also develops over time. This results in a higher appreciation value of the property and can yield you a good return in the future.
Is It Safe To Invest In Commercial Property Now?
Real estate is always been the preferred investment option. But this pandemic has hit hard and the real estate market is struggling. Now the big question is, “ Is it a good time to invest in commercial property?”
Commercial real estate is performing well over the past few years and experts believe that despite the pandemic this sector will recover soon and will fetch you good returns.
Due to the Covid outbreak, most of the property prices have been reduced. This is the best time to buy any commercial property with the best rates which can give you very good returns in the future.
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