When looking to invest your hard-earned money, there are several choices available in the market, but sometimes it can be overwhelming.
From stocks – equity or mutual funds, fixed deposits, bonds, commodities the choices are immense. Some of them are high risk with uncertainty on the return rate, some are low risk but give low returns. One thing common about these is the time and research that goes into these investments. For an investor, who wants a good return but cannot invest time into the constant research to understand when is a good time to exit the market, what are the options? The answer lies in the real estate market.
Real estate market has time and again proven its potential as a great investment opportunity. There are two options available to the buyer – residential property investment and commercial property investment.
Lets understand a bit about both these investments.
Residential property investment basically means buying a house, apartment or farm house. A residential investment can range from a few lakhs to crores depending on the location, size and facilities in and around the area.
In the long term, this has proven to be a beneficial investment opportunity but the rental returns tend to be on the lower end. The rental returns tend to be in the range of 1-3%. One of the other common problems when renting is the risk of encroachment by tenants. This problem leads to an additional expenditure from the investors side to get back the possession.
Commercial investment property in India is a tried and tested way of investment with a well-proven record. When looking for commercial property investment, one can purchase an office space, retail space, or warehouse space. Commercial investments can be a small space to rent out to a shopkeeper, a small office, or a large space to lease for a multinational company for office space, warehouse or storage facility, hospitals, colleges, or even resorts.
Not only does the long-term value of the property tend to give good returns but also the rental pay back ranges from 6 -12%.
A big benefit of commercial property investment is that the lease tends to be for a longer-term and not a short-term contract like in case of residential property. While investment in commercial space does require a higher amount, options like fractional ownerships give an opportunity to an individual with a lesser budget to also gain the benefits.
Finding the best commercial investment opportunities involves a bit of research in regards to the builders reputation, build quality, facilities in and around the property, property value if looking to purchase a shop or small to midsize office space.
When looking at investing into a bigger space, one should look from the perspective of a prospective tenant. The most important commercial property investment advice that stands true for any real estate investment is investing in the right location.
Shriram Business Park is an integrated residential and commercial property which caters to the needs of diverse investors. A perfect mix of luxury and heritage to stand above all others.