Where to Invest? Residential or Commercial

Residential Vs Commercial

Investment In property has become an open choice for the investors. With the rapid growth of urbanisation in the country, the need of the hour has been changing from day to day. People are now shifting from rural areas to urban area in search for better feeding and living.

With this rapid movement of the individuals from rural to urban and the attractive earnings of Indian youngsters has influenced them to make investments. Now Investment in Real estate industry does not only provide a better ROI but also enables them to add an asset to their values.

Now when it comes to investment in Real Estate, Suddenly a Pop-Up Button appears on the mind asking certain questions to him. Now you must be thinking what are the questions are??

Whether to invest in a Commercial property or Residential property??  The mentioned two of the following belongs to same industry but they are two different assets of the investment.

Residential property provides assurance on steady rental income as well as capital appreciation then Commercial property. This is because of the increasing demand for the housing society. But there are certain overheads to borne. The maintenance cost, insurance and repair of property must be paid by the landlords.

Tenants in the residential property often go in for short thus affecting the constant income from a single one. Nor can tenants be easily evicted if they fail to pay rent or if a higher-paying tenant comes along. Rental yields in India are actually among the lowest in the world, and rarely exceed 3.5% even in a city like Mumbai. This is why most residential property investors focus more on capital appreciation, which can be as high as 15-20% for well-located properties in the primary cities.

Now when we look into the second side of the coin, Investment in commercial property may prove a better one but at same time it is influenced by certain other factors also such as Investors financial clout and risk appetite. Investment in commercial property involves higher amount in terms of connectivity, locality. While residential property tends to find buyers or tenants in most locations that offer sufficient transport and social infrastructure, commercial real estate investment must be finely focused on high-demand locations

Leasing out a commercial property is hassling free than residential property and the owner of commercial property is not limited by parameters such as lease, documentation and other things. In other words, this asset class can make more sense while deciding between residential and commercial property investment.

 

1 Comment

  1. Great article! I was looking for this information since a long time. I had the same question before, your article helped me solve it! Thanks! Keep up the good writing.

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