ADVANTAGES OF INVESTING IN COMMERCIAL PROPERTY IN MOHALI
The first mistake rookie investors make when taking their first step in the real estate business is that they limit their scope to the residential ones only. However, this is can make you miss out on the tremendous opportunity of investing your capital into commercial real estate. The possible income and equity ownership make it well worth the investment and the risks that come with real estate investments. If you are still not convinced for the same, here are some of the biggest benefits of investing in commercial property in Mohali:
Higher Income Potential
Since the property size and tenant numbers in commercial real estate is generally higher than that of residential real estate, the returns are also much higher on an annual basis. This is even more than the returns on investments such as stock dividends. Moreover, the range is much larger for CRE properties since these are usually rented by big brands and multinational corporations.
Higher Equity
Since most of the equity in commercial real estate depends on leveraging, you can expect it to rise as per your investment. Leveraging lets you use borrowed capital to invest in the property while expecting the returns from the investment to be much greater than the interest you need to pay on the capital. This allows you to use a small amount of your own capital on a property while financing the remaining amount from a bank. The profits from the property will cover the loan from the bank and will allow you to use the remainder of your capital to invest in other properties. Moreover, commercial property leases are easier to approve when a bank finances them.
More Tenants
An increased number of tenants in commercial properties decreases the risk by a large margin. Most of the multi-occupancy buildings will have a lower risk of income loss due to vacancies since other tenants would continue to pay rent and escalations. This is very rare in the case of single-family residential leases since the tenants can leave to create a full income loss. Moreover, most commercial real estate leases are more favorable towards the property owners in the form of Triple N Leases. This ensures that tenants would be responsible for all the main expenses in the property apart from their base rent.
Security
Unlike in the case of stocks, mutual funds, and several other forms of investment; commercial real estate promises an increase in the value of both the land as well of the infrastructure on the property. The needs of most commercial properties in Mohali are quite basic and hence they are bound to appreciate in value with minimal maintenance.
Excellent Appreciation
Speaking of appreciation, the value of a commercial property is bound to appreciate with the progression of time. This is a significant advantage over stocks and other investment options that don’t allow for a lot more than buying and selling the commodities on the market. In the case of commercial real estate however, you are bound to reap the benefits by investing in improvements in your property, provided that you meet all regulations. You can modernize the property, give it for rent to big brands, raise the rent, and even apply for changing the zone. All of this can help in increasing the value of your property. Moreover, inflation benefits the value of your investment instead of degrading it.
By looking at the above, you can see why investing in commercial property in Mohali is one of the soundest decisions to be made this year.
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