Indian commercial Real Estate has been recovering from the Covid pandemic after effects and witnessing some comeback in recent years. The demand for commercial properties is growing at a notable pace. As the demand is coming back to normal, investors are again showing their interest in purchasing a commercial property. It is believed that commercial big corporations and institutional investors are more prone to invest in commercial properties. This is not true in every case. Even other buyers can have the opportunity to invest in a commercial property like Orion One32 viz. (office space or shops).
However, it should not be ignored that owning a commercial property in Noidarequires some extensive research work to accomplish the task. Commercial properties too (like any other asset) have their own Pros & Cons. It is important for an investor (or a buyer) to look into every aspect before going for an investment.
PROs
- Higher Rental Incomes
Rental income is one of the attractive features of investing in a commercial property. You can expect a return of (around 2-3%) for a residential property in an Indian metro city. On the other hand, in commercial properties a return of (around 5-9%) is possible. Thus considering rental income, commercial properties are a better prospect in getting higher returns.
- Longer Lease Durations
The other main advantage of owning commercial properties (offices & shops) is that they are leased for a higher time duration. This ensures a guaranteed income for a longer period. For example, office spaces are normally leased on rentals which will be updated (every 3 or 5 years.) Having a larger lease term will benefit the owner in getting a constant flow of income in the coming years and that too without any hassles.
- Professional Tenants
In a commercial property setup, the inhabitants are normally professional institutions. Normally (a Bank, MNC or business) takes on lease office spaces. Henceforth, they are experts and generally simple to manage like Bhutani Cyberthum. It gives the landowner more genuine tenants in managing a Commercial space.
Cons
- Huge Investments
If you compare the investment part, commercial properties require higher investments than commercial property in Noida. Likewise, tax benefits are also available (for EMIs paid with respect to residential units). Commercial properties lack in giving out such benefits.
- Economic Conditions Dependency
The other disadvantage of owning a commercial property is its dependency on the economic situation prevailing in the country. If the economic activities are on a high, the demand for commercial real estate also goes up. However, if the economic conditions are moderate, then sometimes tenants are not easily available.
- Finding replacements are tedious
It is exceptionally difficult to find a substitution when inhabitants leave. Even though a commercial property has a longer lease term, once the occupant leaves, observing another probably won’t be extremely simple. Likewise, by and large, the lease is unidirectional-which implies that an inhabitant can’t be replac before the commercial property in Noida lease time period, however, an occupant can leave.
- Prior Research Needed
Before putting your money into commercial properties it requires pre-investigation. One needs to do some research work prior to making the investment. Various factors need to be examines , viz location research, market conditions, amenities, and so on prior to making investment decisions.
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