The Investment Factors for Commercial Properties

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Author: Janvi Ahuja

Hi, this is Janvi Ahuja, content writer and blogger. I'm currently writing about different real estate projects in Noida and publishing blogs on Education and about Charitable Schools in India.

If you are at all interested in the investment areas and have discussed it with your friends, then the chances are in favor of you hearing good things about real estate investment. Most real estate investors select the residential properties for investment as they are highly comfortable and familiar with this type of investment. For such developers, commercial property is kind of an unknown territory. If you do not have regular basis interaction with the issues and needs of a commercial office space (which is true for most of us), then you do not understand the basic things for investment in this sector. However, the commercial properties have their own advantages.

Return & Risk:

The residential properties are selected by the investors mostly as it has lesser risks, but the trouble with this kind of investment is the less return. On the other hand, the investment in commercial property performs absolutely opposite of it as the returns are high with higher risks. In our country, the industrial areas and the commercial projects vary a lot depending on the industry and the location, but if we take a broader look to overall performance, then we witness the higher returns of commercial properties by a big amount.

Leases Period:

Most property investment returns are based on the leasing of the property. The residential properties have shorter lease duration in comparison with the commercial properties. For residential properties, this duration is as generally six months to a whole year, while for the commercial properties the duration of lease generally tends to remain in range of five to ten years. It is not very rare to see commercial office space leases which are made for initial five years, and the contract keeps the option of renewing it for next five years as well.

Quality of Tenant:

With your investment in commercial property, you want high returns and reliable returns. The kind of a tenant you get is a crucial part of all this process. Unlike the residential properties, for commercial properties you get a big corporate firm as your tenant. For a professional firm, it is unlikely that they will fall behind on the rent or cause any other sort of harm to the building. The lease is also taken out for a longer period, giving you the peace of mind. In any way, having a corporate firm as your tenant is better than having a family with children as tenant in your property.

In this article, you'll know about important investment factors in commercial property. Janvi Ahuja sharing this useful information on commercial property investment and commercial office space.

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