Investing In Commercial Real Estate Is the Prudent Thing For Now

by R.Tech Developers R.Tech Developers

India is the land where people consider real estate as the most profitable investment option but past few years has seen weakened momentum in the real estate market. Poor economic growth and high property prices are a few reasons that made buyers sceptical about putting their money in real estate. So, does that mean the real estate is no more a lucrative investment thing?

Weakening Residential Rationale
Generally, people put their money in real estate by purchasing their own houses. Housing has always been the preferred possession for investment in real estate. The motive being, as the consumer move up in life, he can lease out their first purchased property, fix up a descent monthly income and secure a larger and better located place for their personal use. This is anyhow a typical story of Indian investors and so far, they have made the right decision as well. But, this old scenario might not fit in current real estate market trends. The ever-increasing prices of housing properties and their low/slow appreciation levels have made things go negative.

Commercial Firms Up

For people who still want to invest in real estate, investing in a commercial property with Real Estate Developer in Jaipur, is the better option. With the superfluity in the commercial real estate market, prices for these units are rather low in comparison to the residential spaces. Apart from this, another reason for investment in this segment is, one can secure regular monthly rental and capital appreciation, Yes, there is scope for both.

Traditionally, investing in commercial properties were perceived as an asset class, since it requires huge investments, where only institutional investors and heavyweight HNIs can participate. But, with time that thinking is changing – as many small investors are getting hands on into the game of commercial real estate investment.

Let us discuss a few points that make investing in commercial property a safer bet for retail investors:

1)The Impact of 'Achhe Din' – With the present government paying attention to business goals, there is new confidence at the global and corporate investors levels. With changes being made in the FDI norms for the segment, there has been considerable strengthening in the market sentiments. Then again, government campaigns like ‘Make in India’ are powering capital inflows, thus raising the demand for increased construction of commercial properties in the country.

2)The Start-up growth – With more and more citizens fulfilling their entrepreneurial desires, the country is seeing an upward growth in start-up businesses. As discussed above the new confidence in economy and policy reforms has helped these new day entrepreneurs to fetch investment not only from foreign investors but also from local corporate giants. This is the main factor that leads to the growth of commercial real estate development across the country.

3)The Price is right – The Indian commercial real estate is still going at 25% low average capital value than the recent peaks seen in the year 2008. In contrast to this, the residential real estate has already surpassed that peak in 2011. With commercial properties looking less expensive, helps the builders in attracting a large share of buyer’sinterest.

4)Better returns – One of the main reasons people invest in real estate is ‘Returns’, which in commercial property as of now is 8-11%, in contrast to the 2-4% in residential real estate investment. Given the increasing demand for office spaces in tier-1 and tier-2 cities, investing in commercial projects is a good future proposition. Yields or returns on commercial property investment is not only better than residential investment but also give better capital appreciation to its owner.

5)The REITs Route – The REITs or the Real Estate Investment Trusts are shared investment bodies, expected to be opened up shortly, these entities will focus on investing in income-yielding and completed real estate projects. The income generated is then distributed among the investors. The formal guidelines for REITs trading have been allowed and introduced in India and several high returns generating property owners are considering setting up this entity for attracting investors for their projects.

In Short

Today, investing in commercial projectsvia a reputed source like Real Estate Developer in Jaipurhas come up as the more sensible route to investment.

For more information, visit https://www.rtechgroup.co.in/