CONSUMER BEHAVIOR SHIFT FROM RESIDENTIAL TO COMMERCIAL PROPERTY BUYING

Commercial properties are becoming a good place for investments recently. Well, the term ‘commercial property’ implies to those properties that have reference to the following:

• Industrial Buildings
• Retail Buildings
• Warehouses
• Apartment Buildings
• Office Buildings
• ‘Mixed Use’ Buildings, where the buildings or properties have a mixed usage like office, retail and apartments in one building.

Why buy commercial property

There are many reasons why a buyer opts for a commercial property to residentials these days. Not only they are hassle-free when it comes to leasing and its terms but give very good returns from a monetary income perspective as the tenure of the lease lasts for a long time. Having a commercial property always ensure professional dealings unlike the ones of residentials. These properties are the ones that can fetch you money with involving less time from your side especially when you have technical and professional assistance or services associated.
To earn rental yield

The rental yields are used in comparing the several properties that produce income apart from signifying a rate of return from a certain investment. To earn rental yields, you must know how to calculate them so that it helps you in choosing your investments in properties. For that just go through the following steps:

• Calculate the costs of your properties
• Calculate the gross rental yields
• Calculate the net rental yields

However, it is very necessary to consider that the property meets the requirements of the tenant in the locality. A 3BHK apartment which is overpriced in a high rental yield locality can fetch you a higher return in terms of rent but having an oversupply of properties of the same nature in the locality with zero matching demands will imply that investment out here is insensible. At the same time, the rental yields won’t be a good figure at all.

Appreciation of the property

Commercial properties, as we know by now are becoming the favorite place for individuals when it comes to investments. The outlook for the sector of commercial properties has always been optimistic when you are talking about appreciation. Real estate market is itself a strengthening one with respect to prices and demands making investments in commercial ones a profitable option as per the records and reports. The segment has the potential to witness a considerable capital appreciation. Retail shops and office spaces generate around 9-11% of a rental income making the capital appreciation at 3.5% on a yearly basis.

Investment aspect of buying

The risks are very minimal and the opportunity for investments are pretty good in the commercial real estate. It gives a high rental yield unlike the residential properties making it a favorable option for investment for the individuals. As said, it not only gives you a higher rental yield but also provide you with a stable assurance to earn good cash. The residential spaces provide you with an income of 3-4% annual income which is too less if compared to the figures generated by the commercial real estate. If you wish to achieve good returns, it is advisable for you to stay for a long term.

Promote properties in Pune

Pune has become an investment hub for all the large organizations of national and international origin. The city is set to make a mark very soon in the pages of history. The builders and real estate developers from the government and the private companies are focussing on developing both residential and commercial properties in Pune. It seems to be profitable enough for the investors of both national and international origin since the sectors of commercial and residential properties in Pune are facing an expected incredible growth. Buying property in Pune in the next few years will be profitable for the buyers no matter it is a residential or a commercial property. Thus, the time is near to witness the historical incident take place.

Pros and Cons of commercial and residential property

Now, let us take a look at the pros and cons of commercial property buying.

PROS

• Potential for good income;
• Affairs are restricted to professional;
• Operating hours are limited;
• Property evaluations are easier;
• Net leases are tripled.

CONS

• Time management is difficult in case of multiple ownerships
• Professional help is a must
• Initial investment is bigger
• Risks are more as visitors for property are unknown

This kind of buildings has a lot of advantages and disadvantages that might justify the shift of the behavior of the buyers from residential and commercial. The above-mentioned points are ongoing reasons for any shifts in the behavior as they exist since the rise of the concepts of the real estate sector. In other words, commercial real estate is the new buying trend in India as everyone turns out to be a money-minded one.