Why should you look beyond residential investments?

The number of commercial deals in the newspapers far exceed the residential ones for a reason! Just Today the internet broke again when RMZ Corp acquired Essar Group’s Equinox Business Park for Rs 2,400 crore. This only goes out to say that the commercial market in Mumbai is doing far more better than the residential one! It’s time you take a piece of this cake.

But even then Every time, I speak to an average property investor looking for investment opportunities, nine out of 10 chances are that he or she is in the market looking for residential options. Either it is a second home with scope for appreciation or it is an apartment with potential to rent.

Top Reasons to Invest in a commercial property vs residential property:

1)For starters, rental yields in commercial property tend to be much higher compared to residential.

2)Typically, commercial tenants would maintain the property better as it is their place of business.

3)If you have an existing tenant, it is much easier to exit commercial as there is an established market for such properties.

4)Commercial leases tend to last much longer than residential leases – five years or more versus an average of one year (although residential leases tend to be more readily renewable).

5)Residential property is also likely to require more management time (and/or cost) than commercial property. This is because of smaller unit sizes, shorterlease lengths, and a greater obligation for maintenance and repairs.

So next time you come across a big or small ticket size commercial deal, take action on it!