Tuesday, 4 September 2018

3 Golden Rules to follow Before Investing in Commercial Properties

You may think investing in commercial properties is a tedious task, but that is not the case. You can get huge returns from property investment that many debt instruments do not provide when you follow long-term investment principles. The rules that you must keep in mind before investing in real-estate are:

1. Location
We all know that location is of supreme importance when it comes to buying a property. Commercial properties offer returns through two ways – capital appreciation and rent. Both of these two ways hugely depend on the location. You should look out for locations that have vacancy below 5%. What this means is that tenants are not likely to vacate their place and that the demand for property is good too. All of this will, in turn, lead to capital appreciation and increased rents.

2. Security
Security deposits for commercial properties fall in the bracket of 10-12 months. If tenants are offering 6 months or even below this number, then this could mean they are on the look-out for an option that is not for long-term. Moreover, it could be because the tenants have cash flow problems. Start-ups are the ones that mostly go for shorter lock-ins and offer smaller deposits.

3. Diversify
It is a known fact that diversification reduces risks. This also holds true when it comes to commercial properties. Do not invest all your savings in a particular property, because if this is not done, you will be exposed to a greater risk. If the tenants vacate the property, then the rent will stop coming in. Also, costs like maintenance payments, etc. would be needed to be paid. Hence, if you invest in numerous properties, it will decrease income variance, because there will be a diversification in property level risk.

These are some of the rules that you can follow before you buy commercial properties. There are various options that you can checkout, like Noida Commercial properties among other areas.

If you choose Commercial properties in Noida, you will get access to a lot of benefits if you follow the tips mentioned above.


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