People who have accumulated their hard earned money are often seen pondering over the thought that what investment of theirs would return them the most, commercial property or residential property.The following content has been framed to help those investors get a clear idea where to invest and why.
Since the boom in the real estate sector, there have been a swarm of investors who want to invest for a long time and carry a strong holding capacity. Well, researches have shown that it is good that an investment be made in the residential property because of the subsequent factors:
- First is the affordable rate that these residential properties are available at. The commercial property seen on a comparative level is costlier and hence requires a good capital in hand to invest.
- Investing in the residential property is considered for those who are looking for a high property rate in the future and medium monthly rental money. The commercial ones whereas demands 5 time high rent rates and the property rates grow slower than the residential property.
- It is easier to locate a tenant for the residential property and the commercial property faces a high vacancy rate. According to a study, there are more than 50% of the commercial properties that are vacant in the top cities of India. And on an average, commercial properties in India face 17% to 19% vacancy a year.
- There is a risk to bear the maintenance and repair costs on the residential property whereas the commercial property tenant takes care of all these himself. So, in this direction the income from from residential property can be low as compared to the commercial property.
- The market for the commercial property is a global economic dependent and hence is little unstable as compared to the residential property market.
- The tax that one has to pay on the commercial property is also higher than the residential property tax, making it better to invest in the residential property.
These are some of the attributes that indicates a safe residential property investment. However, the commercial property in India too can be considered if the property promises good returns and is situated and occupied by the paid tenant.