A commercial property could be anything from a small shop to a small office space or malls. Each of them should be looked at from different perspective in terms of returns, exit options, tenant profile and investment amount. Investing in commercial property is a bigger decision than going for a residential property. It is a business in itself with owning a property with number of tenants, commercial and residential properties respond differently to the situation.
India has been put on the global map and foreign investors are willing to invest after foreign direct investment in retail. Starting with some of the essentials like location, type of property and expected returns there are lot many things to take care of when individuals plan to invest in commercial property.
There is lot of risk involved in buying the commercial property but, in case individuals are willing to reap benefits they need to inspect thoroughly before going ahead with any of the services. Some of the aspects that one should be looking for before investing in commercial property are:
- Review the Locality: Understanding the behavior of the market is important as each market comes with pros and cons in terms of tax values, land inventory and environmental issues. Contacting the municipal authority can help in knowing the current issues and development in the locality and the plans for the future.
- Get the Money Ready: If you have a proper plan then the job is almost done as getting a right property is difficult these days. Banks have started offering pre-approved loans so that you do not have to wait for the approval once the property is finalized.
- Expert Advice can be Helpful: Consulting the experts like lawyers, property consultants and accountants can help in making the understanding clear regarding finance and legal aspects. They can also aware you about the available properties in the area.
- Go through the Layout Plan: Before investing in any of the properties it is important to check the layout plan not only of the space that you want to buy but the whole building or entire complex. This plan can give the idea of the space in respect of its attractiveness and would optimize the process and reduce the waste side by side.
- Opt the Right Builder: Go for a builder who has taken up commercial projects before. You do not want to block the money and wait for years to get the possession so, it is advised to do a background check of the builder before going ahead with the investment.
Smaller spaces are also available for the investors with small budget unlike earlier. NRIs who are willing to invest should check for the job market, population growth and economy is flourishing. Investors should look at high street retail if they are planning to invest as malls sell in bits and pieces can get into trouble. Additionally, due diligence of property tax is also important to see if the invest is going to be fruitful.