A commercial property is considered as a beneficial deal for investors as it provides lucrative returns in longer run. Those investors who wish to spend their money wisely are attracted to commercial real estate in India. With stable markets and commercial property sector booming in the country, it is the best time to invest and reap the rewards in future.The multiplying number of industries, employment rate and skilled population has strengthened the confidence of buyers, who are allured by the price stability factor of this commercial real estate. However, if you are a new investor and looking to invest in this sector, then you must prepare yourself for the challenge ahead. Here are a set of rules that will help you in making a smart commercial real estate investment.
1. Location of the property
Location is the key element while searching for a property. Commercial properties give returns via two areas – rent and capital appreciation. These aspects are dependent on the location of a property. A location with less than 5% vacancy assures tenants will be less likely to vacate. This will lead to higher rents and capital appreciation.The location should be easily accessible via various modes of transport, to consumers and to all other stakeholders. The locality should have a well-developed social infrastructure in place.Being close to other commercial hubs gives the location an added advantage.
2. Quality of project
Two properties can be on the same location , however the quality of construction attracts tenants. A quality project also attracts better commercial companies to approach you for rentals. Multinational tenants are always willing to pay a premium for quality. Look for certifications in buildings or that have nicer looking lobbiesmore elevators, higher ceiling heights and better views. Higher quality properties are also more liquid and can be sold much faster.
3. Scope for growth:
A pre-leased commercial building is a great option for generating rental income immediately, while larger units are preferable for better long-term returns. Parameters like the demand vs. supply ratio, market rent vs. in-place rent and rental yield ratio may indicate a scope of growth in the value of the property.
4. Assess the market:
The demand and supply of a commercial property id directly proportional to fluctuating interest rates on loans as well as changes in government policies. Gaining knowledge regarding these aspects which affect the value of a commercial property will turn out to be profitable while taking an investment decision.
5. Diversify the investment.
A crucial decision for real estate investment is its diversification. Selecting the correct size of property to investing in multiple projects to be leased to various type of tenants is an ideal way to reduce the risk involved in such investments and maximise the returns on investment.
6. Interior work
A property must be designed in such a layout that it is multipurpose which can enhance the returns. Such kind of layouts are suitable for different kinds of tenants. It will increase your target audience while leasing the office building. In other cases, the tenant does the interior work themselves, which involves flooring, wiring, cabin constructions, conference rooms, reception, cafeteria etc. This assures that the tenant will stay for long as they have invested in the interior fitouts.
7. Maintenance& Tax-benefit
In a commercial property the tenants pay for the maintenance charges as they are working on the property. This leads to a good return value as rentals as compared to a residential project.
Commercial properties provide tax benefits and depreciation allowances.GST credits can be claimed on purchases which are connected to the leasing of the property.
Conclusion
Investing in a commercial property for sale in Pune is a rewarding scheme which brings along a lot of benefits. However, you need to be aware of the risks and make an informed decision after understanding the rules of investment mentioned above. Sukhwani Constructions is a prime developer for commercial properties in Pune with various projects in major locations. Get in touch with our team for booking an appointment or visit.
