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Make a Smart Commercial Real Estate Investment

A common question among investors is, ‘What are the advantages of commercial real estate investments as compared to other investment options?’

There are several investment platforms available today. The stock market is one of the popular options; however, a number of investors are moving out of that venue because of market volatility and low ROI (return of investment). The platform that offers best opportunities and maximum profit in this volatile economy is a commercial property with high return of investment.

commercial real estateMany who previously believed in investing in the residential real estate market are getting into commercial investment properties, as the current market conditions are creating a good opportunity for making this upward transition.
Continue reading “Make a Smart Commercial Real Estate Investment”

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Things That Make Investing in Commercial Real Estate a Big Deal

What can be a better deal than investing in something that doubles the money? And investing in commercial real estate is a sure shot formula of getting higher profit at minimal risk. However, to accomplish it successfully you need to go for some smart choices like when to buy property for investment. Your utmost objective should be to hit the right area at the right time.

commercial property in gurgaon

Below are some of the main points that make investment in commercial sector a big deal:

Cash-on-Cash Return: When you invest in any illiquid asset, such as real estate, you take money out of your liquid assets, including stocks and bonds. And on these liquid assets, you were earning around 4 to 5 per cent return; therefore choose a property with high return. This will help you to earn decent returns.

Less Time for Managing: There are a few real estate properties that require a lot of managing time. Therefore, it important to go for a smart investment, and avoid properties with vacation rentals or properties located in bad areas. However, a good property rented to a decent tenant can be advantageous as you need not to put in too much managing time into the property. Moreover, when you treat your tenant nicely and with respect, there will be no hassles and things will move smoothly.

Invest in a Growing Area: Preferably choose a growing location over an established one to get a good return. In any developing area, the rate of property will be very high and that can be little difficult to invest in for a middle class person. And even then if you are planning to invest in a developed area, you might have to compromise with a small size commercial property. Moreover, the value of commercial property increases more in any developing place, than that of developed area.

Guard against Inflation: Commercial property for investment sale has a high potential to evade inflation as the values and rents of properties increase regularly. For occupants, renting a property has been more attractive in comparison to the new construction, especially during the times of inflation. Nobody can forecast the time of inflation, so if you are lucky enough and invest right before the inflation, you will get a good investment property with returns.

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Know All about Commercial Property Investment

Many of us are well aware of the trends of residential property investments, but when it comes to investing in commercial real estate, most of us are ignorant. People who do not run a business, or have no connections with the commercial property, are generally unacquainted about the commercial property trends. However, it is always a wise choice to stay abreast of all the investment trends taking place in the real estate, because you never know when you might need to invest in a property. Let us gain a little knowledge about commercial investment properties and the benefits that come along with them.

commercial property investment

  • Risks and Returns: When we talk about commercial property investing, it should always be noted that it there is always a higher risk involved in it and at the same time, it is a property with high return. The commercial real estate market varies from place to place, but when compared to the residential property, there is a huge difference between the two. A commercial space might take several days to be leased out. Thus, the risk involvement is high in a commercial property.
  • Period of Lease: When a commercial property is leased, it is generally done for a long period of time. The period might be as long as about ten years. Also, various commercial properties can be leased out for a period of five years and then the lease can be renewed. The annual rental increases between 15 to 20% .
  • Ratio of Investment: Commercial properties are expensive than the residential properties. Factors like posh location and huge size of the commercial properties are a major reason for the high price. However, whenever you are looking for a commercial space, you can also choose a small premise and purchase a commercial property within a small budget.
  • Fixed Costs: Despite of the fact that the commercial property has been leased or not, there are a few operational costs that are involved. However, these fixed costs vary and depend on the property type.

Benefits of Investing in a Commercial Property
By investing in a commercial property, you can increase your cash flow in a number of ways. Let us have a look at a few ways:

  • Buy and Exist Strategy: The best way to collect a huge amount of money is by first buying the property, then building an equity and then finally, selling it off. You can earn huge profits when you sell off the property.
  • Monthly Rental: Leasing your commercial property is one of the easiest ways to generate monthly income without working hard. A good amount of money goes into your pocket if you lease out the commercial property owned by you.
  • Run your Own Business: If you are a businessman, there can be nothing better than owning a commercial property. You save the money that you would have otherwise spent in paying off as a rent to the landlord, had you not owned the office space. (https://kidsrkids.com/)
  • Let out the Extra Space: If the commercial space that you own is more than that required for your business operations, you can easily rent it out. This brings in extra income and at the same time the extra space that your commercial building has, does not go waste!