Real Estate market has been growing at an enormous speed superseding growth of other industries. Real Estate presently contributes around 10% in GDP which is expected to grow to 13 % with the implementation of RERA, smart city mission undertaken by the present government. The development of cities and the sub-urban areas have been rapidly increasing demand for commercial spaces which includes space for commercial offices, schools, Universities, hospitals, hotels, malls, factory, warehouses etc. Investment in commercial space is now the most lucrative proposition for earning high Returns on Investment. But surely before investing your hard earned money, especially in commercial project which demands higher amount, one should look into and verify several factors for the safety of the investment.
1. Location Study: Growth of a location depends upon the development projects that take place in a location. Sometimes you may find that a location has already reached a saturation point of growth and property prices have already touched a peak. Then it may not be advisable for a small investor to invest in such location. However large corporate investor may choose such location looking at the other business benefit as a corporate investor. The small investor may prefer a location which is in growing phase. We can say as an example that Delhi or Mumbai may be the preferred choice for large corporate businesses. However, now many corporate houses are strategically investing in locations away from the metro cities. KW Group offers both the choices. KW Blue Pearl is a commercial project in Karol Bagh, Delhi and a most coveted choice for big investors specially an ideal location for big Jewelers. While their KW Delhi 6 mall project in Raj Nagar Extension, Ghaziabad is in high demand for investors interested in buying shops. The lowest price of a shop that was around Rs.30 lakhs at the starting point of the project has already gone up to around Rs.50 lacks and expected to move up further in a short span of time. Therefore, the first and foremost step is to do some research work on location and its prospective commercial growth in near future.
2. Taking Advice of a Financial Expert: Investment in property is a major decision in one’s life. Especially when we talk about the commercial space, its viability is most important. It is a complex decision to take. In KW Delhi 6 Reliance is opening its huge retail mart where all grocery items shall be available. I shall not advice a small grocery shop owner to invest on a grocery shop in the same vicinity where a giant like Reliance smart will be present. The financial advisor shall also be able to suggest a viable investment plan and may be able to help you to loan from banks and financial institution at a competitive rate of interest.
3. Make your Business Plan in Advance: Just investing money on a commercial property is not enough. You should know how you will utilize the space and earn profits. Make proper provision in your cash flow projection to make all monthly and annual payouts from your income. Therefore you should very carefully analyze the scope of generating income from it on a regular basis either by leasing out the space to some business or doing the business yourself.
4. Plan Your Layout Properly: The commercial space is costly, so you should utilize the space properly and must see the layout will have a positive impact on the operational efficiency. It may be worth to take advice of an interior consultant or an architect, who can plan and design your space in a professional manner as will directly affect your earning scope.
5. Reputation of Builder: A commercial property should always be purchased by verifying the reputation of the builder. You need to see the builder’s experience in the area of commercial construction and project undertaken by the builder in past. The records of the builder in handing over projects within the committed time, clarity and transparency in financial & legal transaction. These days it is quite easy to do some research on the builder by browsing the internet.
Conclusion: A first time investor in commercial project needs to be more careful and therefore following above mentioned tips may come handy and assure you success and prosperity. Ways consider that investment in commercial property is different from investment in fixed deposit with a bank. The Bank pays you a fixed rate of interest. But a Commercial Property has the scope of earning monthly rental or profits plus capital appreciation. But your wrong step can have adverse effect also. Therefore, following above given tips are most important for choosing a commercial property.
KW Group's Anthem.