Thursday, September 6, 2012

Investing in Commercial Property

In the aftermath of the real estate property market meltdown, people were naturally averse to taking risks, by investing in residential and commercial property. As a seasoned investor would advise you, in such bearish times, there are a lot of opportunities to take advantage of. With the real estate prices hitting rock bottom in recent times, many properties can be bought, at a fraction of the price they would have earned during boom time. While there is substantial amount of risk involved in buying commercial property, with proper research and wise choice, there's profit to be made. At the outset, let me expound some of the advantages of investing in properties of the commercial kind.

Advantages of Investing in Commercial Property

Commercial properties primarily include office spaces, shops, storage warehouses, industrial spaces or any other piece of real estate that is leased out or used for commercial purposes. Location and space are two of the prime requirements of businesses and leasing a property is a much more affordable option for them, instead of buying it. This presents commercial property investors with an opportunity to make substantial profits.

One of the prime advantages of investing in commercial properties are the long leases and high rent that owners can earn. Compared to residential properties, commercial ones tend to maintained a lot more professionally, which automatically reduces expenses. The high percentage of return on investment, in excess of 8% to 9%, justifies commercial real estate investment.


Properties in prime locations can expect an annual hike of 3% to 4% in rent, which guarantees higher returns in the future. By handing over the maintenance and administration to a commercial property management firm, you can simplify your life and reap profits in the long term. Commercial property that are located in prime business zones are always in demand and hence you can expect a decent resale value in the future, when the prices in that locality appreciate substantially.

Commercial Property Investment Tips

You need to appreciate the prime importance of 'Location', when it comes to investing in commercial real estate. Businesses are looking for office, shop spaces, warehouses with all the necessary amenities and resources in their vicinity. So choosing a commercial space in the right location is the first important thing and it requires a substantial amount of market research to find such properties. You will have to network with real estate agents, who have a database of such properties on sale.

Decide on how much you are willing to invest, which will automatically limit your choices and help you focus on what kind of properties you can afford to invest in. Once you have shortlisted a few properties, determine the asking price and the projected returns through lease, after accounting the maintenance and taxation costs. If you are thinking of buying commercial property and plan to arrange for the investment corpus through a mortgage loan, do the math and determine the profits you will gain in the future after maintenance costs and loan installments. If the math shows you that the investment is a feasible one and you are guaranteed that your principal is safe with decent returns, go for it!

If you have a commercial space in a prime location, there is always going to be demand from businesses and the chances of your investment being highly profitable are higher. Work out the yearly maintenance costs for the property, research every aspect of the investment thoroughly before going ahead. Here's me wishing you all the very best for your commercial property investment endeavors!
By Omkar Phatak
Read more at Buzzle: http://www.buzzle.com/articles/investing-in-commercial-property.html

26 comments:

  1. Vatika India Next offers a combination of high-rise and mid-rise residential structures in a gated community format. For more details about Commercial Property for Rent, visit: www.vatikainxt.com

    ReplyDelete
  2. This is great, i agree commercial property does a lot for a community, however not many people take the advatage to do so, i've seen to make TO LET signs within the last year, people need to start providing cheap quality services. I've seen a few vacant places on bsm.uk.com

    ReplyDelete
  3. For success in real estate, there should be a combination of the power of investing knowledge and the power of market information.

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  4. These days, Investment is among the most suitable choice for the investing your hard earned money. Some people are investing the profit Real estate investment for making generate enormous profits so when a strategy for bettering at this time there day-to-day lives down the road.

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  5. Having our unique way of handling our business is really important. Today, most of the investors have the similar strategy that they use. If our technique is working, then we should not change it but we must add something to it for the betterment of our business.

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  6. One of the prime advantages of investing in commercial properties are the long leases and high rent that owners can earn. Compared to residential properties, commercial ones tend to maintained a lot more professionally, which automatically reduces expenses.

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  7. Real estate investment is safe and secure way to invest money but many things are also needs to consider before investing in real estate. Researching in real estate market to find out the best property for investment that's very important thing for reducing real estate investment risk.

    Brian Linnekens

    ReplyDelete
  8. We should strive hard for our own sake. Property Investment Portfolio is not as simple as what you think. Many people have tried it and have failed on that. Maybe we should start learning before we invest our hard earned money to be sure on what you will do.

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  9. Commercial property investment is very operative method for getting revenue. These tips are workable for invest in the commercial property.
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  11. Real estate investment is a successful deal that gives only profit. As I know Vigneshwara Developers has developed commercial properties in Gurgaon and they have planned to provide those projects with 12% assured return investment plan for five years. So it is a profitable deal to invest in real estate sector. Investors can get five years' assured return with the property space.

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  14. Set your mind for investing in commercial property of Vatika Group. As we all know that this is the leading real estate property provider in Gurgaon, Delhi and more popular cities of India. Get ready to move business centres in short term offered by Vatika.

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  18. This comment has been removed by the author.

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  19. The benefit of investing in commercial property is that it is characterized by longer leasing covenants than residential property – typically three, five or 10 years – with fixed or CPI annual increases and the added benefit of the tenant meeting the cost of all outgoings, including land tax if the tenant is publicly listed.
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