Wanting to make money and wondering whether getting into commercial real estate will pave the way? Undoubtedly, to buy commercial property is the new trend these days. Unlike before, when people used to consider purchasing real estate for residential purposes as the best, people now have come to believe that investing in commercial real estate fetches more good if you’re looking to earn high profits. We’ve seen the trend gradually change. Residential is the preferred asset class, as demand is higher and less specific than in commercial real estate however Residential realty market is going through a depression and hence thinking of return here wouldn’t be a good idea in case you don’t have the benefits of huge demand. Investing in commercial real estate is not as difficult as it may appear.
If you follow the principles of long term investing, you can earn much higher returns than most debt instruments
The ways you can actually start buying commercial properties and trading in them is mentioned in this blog. If you think you have the zeal to undertake such activity, read forward!
- Check out location: No property can appreciate in value if it doesn’t happen to be at an appropriate location where it is actually demanded. If you plan to buy commercial property, first look for whether the location supports commercial activity and whether any such commercial activity will be happening in near/far future.
- What to buy: This is an important question because organisation now-a-days have varied needs and need space as per their requirements. If you plan to buy commercial property to make profits, make sure you buy some that actually invites organisations for rent. Any space that satisfies needs, is sufficiently large, proper ventilated, offers good connectivity to basic facilities will be given more preference over any other.
- PE Funds and REITs: Private Equity funds and Real Estate Investment Trusts are similar options where you invest some money on a project and if price appreciates, the investors get their share of profits. However, the minimum limits for investment in both cases varies and for any investor with a budget constraint, these options need to be discussed properly before you buy commercial property.
- Offices/Shops: Another option is to buy any shop/office and get into commercial real estate investing. In this case, you can actually rent out these shops to organisations and earn rental incomes. One can buy a shop in a neighborhood market, a residential housing complex, high street area or a mall. “Returns can be 9-10% per annum, or even 12-13% if the shop is in a good location,” said Zia, executive director, Knight Frank India.
- Have advice from experts: Before making any decision, if you are novice, make sure you learn from someone or ask someone about various factors to be kept in mind and various precautions to exercise.