Comparative Study on Residential Properties and Commercial Properties

In earlier times, people used to invest in properties just to live in their. But nowadays it has become an investment option that can yield high returns without any much ado. Investing in real estate provides an opportunity to explore, earn and make big gains. In this article, we'll go beyond the traditional concept and explore the world of opportunities and discuss where you should invest either in residential properties or commercial properties.

There is as such no hard and fast rule on which we can decide that the better property option. There are some pointers given below on the basis of which you can identify where you should invest.

Valuation:- If you compare both of the property options than you will find that residential properties have had its bull run whereas commercial properties are not enjoying a good time and hadn't enjoyed since 2008. But if we consider both of them on the monthly income front then we'll find that commercial properties are a very good source of investment for someone who intends to have regular monthly income.

Also according to the report by Jones Lang LaSalle, "Average capital values in the office sector in India are still 25 per cent lower than their most recent peaks seen in mid-2008. On the other hand, capital values in the residential sector had surpassed their previous peak by end-2011. Given that commercial rental and capital values have bottomed out considerably in most major cities in India over the last couple of years, the commercial real estate is seen with a lot of investor interest".

Higher Yield:- In India, the yield on real estates are one of the best in the world, especially in commercial properties. Commercial properties can yield you more than 10% whereas residential property can yield you nothing more than 4%. But if we compare both of the property types on the basis of capital appreciation then you will find that capital appreciation in the value of real estate is still much higher in residential real estate.

Vacancy:- One of the biggest advantages of having a commercial property is that you do not have to worry about the vacancy issues. Commercial property does not generally remains vacant for too long. And now with the rise of India as a one of the best business destinations, commercial properties are a very secure option for those investors whose ultimate aim is high yield.

And with the pace Indian economy is rising we can say that commercial property is the best option as compared to residential properties.

Conclusion:- After having a clear look on the pointer mentioned above, it is pretty much clear that commercial properties have an extra edge over residential properties. Investors should focus more on commercial properties and less on residential properties if they want to invest and enjoy high benefits.

Also, as per the recent made it is clear that newly formed government is showing interest in developing the real estate sector of the country. And the proposed changes in the FDI regulations is alarming the change. There are many foreign companies who are looking to set up operations in India, and they need large office space for that, which will surely push up the demand for the commercial properties in near future.

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