+91-22-20872233

Blog

Why do you invest in commercial real estate? What are those factors?

Jan , 31

There are uncountable reasons why you should invest in a commercial property. Since real estate has been the most sought after choice for each and every investor, we would like to share some of the most important factors and reasons that may motivate you to invest in commercial real estate. 

  • High income potential:- 

One of the best reasons to invest in a commercial property in Vashi is to earn high potential income. Commercial property has a reputation of giving an annual return off the purchase price between 6% and 12% depending on the area which is a much higher range than typically exists for single family home properties (1% to 4% at best).

  • Pride of becoming a professional landlord:- 

Small business owners generally take pride in their businesses and want to protect their livelihood. Owners of commercial properties are usually not individuals, but LLCs, and operate the property as a business. As such, the landlord and tenant have more of a business-to-business customer relationship, which helps keep interactions professional and courteous.

  • No need to be available all the time:- 

The commercial investment property invites commercial people that lead you to less drama. To explain, they work when you work, you sleep when you sleep, there won’t be any emergency issue where they may call you up for a spare key or are in need of any repairs. For commercial properties, it is also more likely you will have an alarm monitoring service so that if anything does happen at night, your alarm company will notify the proper authorities.

  • Evaluating the price:- 

More objective price evaluations. It’s often easier to evaluate the property prices of commercial property because you can request the current owner’s income statement and determine what the price should be based on that. If the seller is using a knowledgeable broker, the asking price should be set at a price where an investor can earn the area’s prevailing cap rate for the commercial property type they are looking at (retail, office, industrial, etc.). Residential properties are often subject to more emotional pricing. 

 

Post a comment

Your email address will not be published. Required fields are marked *