Real Estate Investment in Commercial Spaces

Real Estate Investment In Commercial Spaces

Commercial spaces are the procurement of office spaces, warehouses, retail buildings, etc. During the past few years, many investment options like residential property, mutual funds, etc., have gone through different challenging times. Today if you are looking for an investment option that could provide you a high return on investments with low initial investment then commercial spaces are the way. With a growing number of start-ups and policy announcements by the government, investment in the commercial sector has gained a new demand in the market.

Due to the outbreak of COVID 19, the prices of real estate have hit rock-bottom and therefore it’s the right time when you can invest in commercial spaces. While other areas of investment are facing a huge decrease in customers, the commercial spaces are found to be growing in an upward trajectory. Although there had been a time when everyone used to work from home, that trend seems to be declining as the re-opening of offices has been started. And it has been reported that in the upcoming year there would be an increase of 53 percent in the absorption of commercial spaces.

Let’s look into some of the reasons that how investment in the sector of commercial spaces is a good decision

Less risk of inflation

The real estate sector of commercial spaces is less volatile as compared to the other sectors. Here you can easily lock clients for long-term rent contracts of 3-5 years or more. This feature helps you to ensure your profits for the few next years without taking care of the future trends of the economy.

Increasing opportunities 

The sector of commercial space investment offers a lot of varieties to invest in. From small warehouses to big retail buildings, there exists a whole bunch of options for every type of investor to invest in. One gets a lot of flexibility to invest wherever and however they want to.

High profits 

High profits are one of the most important reasons why anyone invests in commercial spaces. In the case of commercial spaces, you get a return on investments faster because of the influx of rental income. As companies and businesses are growing, significantly the demand for commercial space and its rent is also rising.

Good value over the period of time 

The whole point of investing is to have appreciated value after a particular period of time. With commercial spaces, you always have the benefit of increased value. The more amenities you provide, the more value you’ll be able to get from your commercial space.

Tax benefits 

The government recognizes the fact that maintaining a commercial space is a difficult task and a bit expensive for beginners. This is why several tax incentives are offered to these owners to keep their expenses balanced.

Limited responsibilities 

The people who invest in residential properties are well aware of the fact that how many responsibilities they have to keep up with it. From constant calls of tenants to regular maintenance, there are a lot of things one has to take care of with a residential property. Whereas with commercial spaces there is a relief since they rarely experience such problems from the clients.

Less competition 

A fact which many are not aware of is that as compared to other investment options, the investment option of commercial space is very less competitive. Due to big infrastructures and long-term deals, people generally don’t think of their niche for investment.

While there exist a lot of good reasons to invest in commercial spaces, there also exist some downsides associated with it. For example, investing in a commercial space for a beginner would be difficult as it requires exhaustive research before. There are a ton of factors that you have to consider before investing in a property. And with this comes the requirement of huge capital expenditure of repair and maintenance along with several external expenses.

If the commercial property you have chosen is not located in a good area then it might also become a problem to find tenants. As the tenants sign the lease for long terms, it might be possible that your commercial property stays empty for a big duration before you find a tenant. The investment in commercial spaces looks pretty promising but it does involve a hefty investment amount. Therefore it is always recommended to consult a local real estate agent so that you can understand the current dynamics of the market and invest properly.

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