The real estate industry is growing rapidly - both in the residential and commercial projects that stand today. The working place of yours is a place where you spend almost thirty percent of your day and we are here to make sure that it is a good one, after all! However, if you are an investor who plans on putting your hard-earned money into commercial realty, here are some tips that may be of good help to make your investment, a wise one:
A. Location: It may sound very obvious and let me tell you, it is. Unless you gain a thorough knowledge of the location, it is never a good thing to invest your money with it. Commercial properties are meant to provide returns through two main avenues— rent and capital appreciation, are supposed to be the most basic ones to know about. Places where the vacancies exist, but less than five percent should be your ideal choice because it means that the supply is checked on a regular basis and the tenants are probably reluctant to vacate, which would ultimately lead to high rents as well as capital appreciation. A location that has a high percentage of vacancy, gives the tenants an option to move and renegotiate the rents.
B. Quality: Two buildings alike, may coexist or be in the same location, but the one that speaks of better quality than the other, will always get the first preference. It will also tend to attract qualitative tenants. Thus, it will then fetch the investor rent benefits, better tenant retention and a much higher capital appreciation. Tenants from different nations are people who show a sense of willingness to pay a good amount for quality.
C. Demand & Supply: One of the first things that a savvy investor has to analyze before making a commitment to buy a commercial property. Every city has different and its own micro-markets. Each micro-market has a different stock (i.e., the amount of office that has already been completed and leased) as well as the upcoming supply. The annual demand is also published on a regular basis by the most eminent brokers.
D.Security Deposits: The security deposits in the commercial properties vary between the monthly deposits of 10-12 months. Be cautious when a particular tenant offers for 6 months or even less, it may signify that they may be looking for a short-term option or may also have cash flow discrepancies. Start-ups typically ask for lesser deposits and even shorter lock-ins.
E. Diversification: It is a stated and known fact that diversification reduces the risk involved. It is especially true in the real estate that is involved in commercial projects. If you are investing your savings in a single property, you are bound to get exposed to higher risk. In any case, if the tenant vacates, the rents will come to a halt while maintaining the payments, property taxes and other miscellaneous payments that need to be paid. An investment in multiple properties across the cities will lessen the variance in income by the diversification at property level risk.
Thus, being an investor isn’t bad at all, but being a wise one is the best that you could be and maybe, you should be. Vaishali can be talked of when talking about commercial property as it is an area that has a good scope of growth and development. It is one of those areas that offer the best interests to any commercial realty investor. Hence, knowing when, where and how to invest is something that you gain expertise in, over a span of time.
Signature Global is a real estate giant that works highly on the affordable housing sector, focusing on the developing areas of Delhi NCR, Gurgaon and Karnal. It aims to provide the combination of luxury and affordability to its buyers at the most economical prices. Some of its best projects include:
The Serenas, Sector 36, Gurugram.
The Millennia, Sector 37D, Gurugram.
The Roselia, Sector 95, Gurugram.
The Orchard Avenue, Sector 71, Gurugram.
