An integral part of one’s portfolio of investment, real estate is valued not only because of the potentially high returns but also because it is associated with pride of ownership. But not every investment in real estate gets good returns. You need to find the correct entry point for investment, especially in the case of commercial real estate in India. Here are 3 ways to invest in commercial property in India.
- Shops
- Offices
- REITs
Shops can be a good entry point for a new investor looking for commercial property. A shop can be purchased in a neighborhood market, a high street mall or area or in a residential complex. Returns can be anywhere 9-10% per annum. Shops can be let-out as ATMs, retail outlet or can be leased to professionals such as chartered accountants and doctors. The size of the property will determine the investment amount.
Most companies these days are in expansion mode and even small enterprises are setting up offices in business hubs across the country. While investing in offices may look attractive, it requires tangible financial resources. Like with all other form of real estate properties, location is very vital for good returns. For investors of conservative nature, ready commercial office properties are better suited. Such properties provide steady income as well as chances of substantial appreciation in the future.
Real Estate Investment Trusts (REITs) are very similar to mutual funds. The money is pooled from various investors and collected amount is invested mainly in a completed, income-yielding real estate assets. The revenue generated from the investment is then distributed among the investors. REITs provide a great way for those with limited financial resources to invest in commercial property in India.
REITs are supposed to make their debut in the Indian market very soon as they have been approved by the Securities and Exchange Board of India (SEBI). The best thing about REITs is that investors can start with a sum as small as ₹2 lakh.
Investment in commercial space can be fraught with problems if one is unwise in his/her investment approach. The thing to keep in mind is that like all other forms of property, location is a very important factor which will determine the returns you can expect on your investment.
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