Wondering where to invest your precious savings? Investing in property is one of the most likable and considered investments. However, you may still need clarification on which property investment to choose such as between residential and commercial properties.
Each option has its own advantages and disadvantages. The main task is to weigh the advantages and disadvantages of these properties before making an investment decision. Here’s a brief introduction and information about both options that you can choose from.
What is commercial and residential property?
Commercial property is one that is meant to provide space for offices or businesses. The income of the commercial property is received in the form of workspace leases and rental payments whereas residential properties are those that are a place to live for either owners or tenants. The payment is received in the form of rental returns.
Benefits of commercial property investments
- High returns can be achieved, especially in large blossoming economies where the footfall and commerce area is high.
- Your investment is taken care of professionally as properties are maintained to a higher standard by the businesses.
- Property management becomes easier as businesses provide a professional experience.
- Capital appreciation is visible in the long term.
- Property management consumes tremendous amounts of time and money as you have to source tenants as well as make all fixes and upgrades.
- Not being able to find tenants for a long period of time makes it harder to cope financially.
- Less rental rates than commercial properties.
- Promises higher return on investment.
Benefits of residential property investments
- High returns can be achieved in popular rental properties and can achieve premium rental rates from local tenants.
- Performance is often determined by the level of supply and demand.
- During the time of economic downturn, residential properties perform well and are of somewhat national importance.
- Commercial property is impacted more than residential property during the time of recession
- Finding tenants for a commercial property takes longer than residential property as it is less in demand.
- Lower loan-to-value ratio making it difficult to secure leverage.
Investing in commercial and residential properties has its own advantages and disadvantages but it is not a decision to take within a day or a night. Ensuring and measuring all areas is necessary before making a serious investment decision. Bansal One in Bhopal is one such space for commercial property that fulfills all the benefits of renting a commercial property with a high footfall area in a prime location.