In the last few years, investing in real estate has emerged as a new mode of investment. One of the biggest perks of investing in real estate is the ability to generate secondary income.
Real estate investing money and securing property is considered the best investment option because of assured, reliable and undeniable profits and better returns. It offers the benefit of a long term security as well as regular income through rental properties as it is a tangible asset. The value of real estate increases over time, and rental rates increase as well, generating more cash flow. The longer you hold onto your property, the more income you’ll make when it comes time to sell, and with a good investment, you can make a lot of money. There are many benefits of investing in real estate, including home ownership, tax benefits, rental income and more. It is also less volatile than stock markets. These elements have increased the interest of people in real estate investment.
Many investors find it difficult to decide between residential and commercial property. Although both are well-known investment options, the rate of return and the amount of initial capital required can vary greatly. Since each of these types of real-estate investment has significant advantages, certain factors should be considered before making any real estate investment, such as tenant availability, site, operating costs, maintenance, rental agreement, And so on.
According to Nakul Mathur, Managing Director, Avantha India, “Commercial investment is outperforming the residential sector in terms of rental return on investment (ROI). Long-term leases and contracts ensure a steady stream of income for real estate investors. Commercial real estate investment in 2023 will be largely concentrated in offices, co-working spaces and low-cost retail. Fractional ownership is a growing trend in commercial real estate today. Instead of acquiring the entire area, the investor invests in a fraction of it and receives higher returns. This trend of fractional ownership will continue till 2023.”
“If the investor has a big investment vision and is looking for a very long term investment horizon, commercial real estate is the right approach. In contrast, while investing in a commercial property, allocation of location, infrastructural development, And aspects like remote access should always be given due consideration”, said Suren Goyal, Partner, RPS Group.
Ideal choice for commercial investment…
According to Siddharth Maurya, Fund Management Expert – Real Estate, “It completely depends on the investment horizon of the individual.”
“As a thumb rule, if the investment horizon of the individual is very wide and the individual is looking for long term to very long term investment horizon, then commercial real estate is the ideal option. However, while investing in commercial property Factors such as time, availability of site, physical and social infrastructure, and connectivity should be considered,” said Siddhartha Maurya.
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Commercial or Residential? complex decisions
Ankit Goyal, Director, Goyal Ganga Developments said that “Deciding between the two can be complicated as each of them has different benefits. The basic laws of supply and demand play a major role in the forecasting process and therefore in your decisions today. If you believe in creating and owning an asset for rental returns, commercial properties are ideal. But if the expectation of trading and liquidation is more certain once your property reaches its value potential, residential properties give faster and better results when bought and sold at the right time. The budget gap for buying a residential or commercial unit has been narrowing of late, as you can find properties under Rs. 75 lakhs. Nowadays, where commercials are available at these prices in most cities, there is heavy buying and availability of residential units above this price, so budget should be the least concern of an investor. The investment market is huge, and investors should know these simple rules when trying to turn a profit in the real estate asset class.
important aspects
Before taking a decision, investors should consider all aspects such as budget, connectivity, rent, maintenance, operational cost, tenant availability and market conditions.