The most common form of investment worldwide is, and will remain, real estate. Investors prefer to allocate a larger portion of their portfolios to secure and generally non-volatile investment options during periods of uncertainty and volatility, such as the last year during the many pandemic waves.
Property investment refers to acquiring commercial real estate with the intent to own or benefit from it. You can achieve this by either making improvements and reselling the property or leasing it. It has been seen that this is very profitable.
1- Tenancy: Existing tenants, their financial standing, and the conditions of their leases can provide valuable information about the asset's long-term viability and the expected return on your investment. Looking at historical data on lease terms and vacancies, you can get a sense of what to anticipate if there is a tenancy gap during the period in which you decide to invest.
A general-purpose office workspace is more likely to be used than a special-purpose warehouse or laboratory. The latter, however, can perform better than the former in terms of capital growth and tenant stability.
2- Elements of law: Government agencies impose various legal obligations, including restrictions on commercial real estate use, registration procedures, and tenant rules. A trustworthy attorney or law firm should also consider the property's title. These requirements are much more critical when it comes to secondary sales.
Having all legal viewpoints reviewed by a legal expert is advisable as property-related legal issues can be time-consuming and expensive. Also, it would aid if you looked out for any charges or unpaid obligations that the seller and broker may have hidden in the sale agreements and property papers.
3- Location: The performance of your asset is strongly influenced by its location. Major highways, nearby airports, proximity to seaports, and ease of access by land and rail are all factors that affect the asset's value and possible future growth. This has an impact on both residential and commercial real estate.
4- Licensed builders: India has a long history of linking the ability to bargain with the developer to the cost of a home. Consideration should be given to developers whose prices are transparent and equitable and solely based on the value of the underlying units. This will guarantee a level playing field whether a person wants to buy or sell in the future.
Conclusion: True, unlike most conventional investment types, commercial real estate does not undergo the same market volatility. Commercial office space rentals have decreased because people choose not to work in offices. On the other hand, changes in the market affect the stability of occupancy, rental rates, and vacancy rate. The Covid-19 pandemic is a prime illustration.
