The whole world is changing rapidly after the recent pandemic while creating new and uncharted environments. Today’s office space investors must monitor the current situation and invest accordingly.
If you want to diversify your real estate portfolio, office spaces can be a good bet. Investing in offices property is a good way to earn high rental income and gain from capital appreciation. In offices, the rental income is 7% to 10% of the property’s value in a year, several times more than what you earn from a residential property.
Here are some of the points you should keep in your mind while investing in Office Space Property
Investment in Best locations
Always remember one thing while investing, that Real Estate is all about Location, Location, and Location. Especially in times of uncertainty, the market always rewards those who only choose the best locations.
If the location of the office building in which you have invested is not in a good location there are chances that you don’t get good appreciation and rental returns. The only way you got buyer or tenant at lessor known location when Grade A location is almost full. Another way is by reducing the price of your property and that can put you in a tight situation.
Condition of Property
Never buy an office space that is in poor condition. It will eat up much of your profits and scare away most future buyers and tenants. The problem with office buildings is that they typically require very high maintenance. A poorly built and maintained property can be a financial drain regularly. Prefer to buy in a new build building that requires no repairing and has a good maintenance system.
If you are investing in office space for rental income then a long-term lease with a sketchy tenant is not advisable. Try to find tenants that will pay rent in both good times and bad. That does not mean that you need flashy big business companies, you just simply need a tenant that has a track record of paying. What a company does is immaterial, all that matters is that they have a track record of paying rent on time.
Timing of Investment
Timing is very important when you are investing in real estate. When you invest in real estate you always want to buy low and sell high and not vice versa. Never buy during a cyclical high in the real estate market, but only when prices are at a stable base.
Remember that it would only take a correction of 15% to 20 % in the real market to derail your investment so while investing has a little patience in taking any decision.
Like residential properties, you can also invest in commercial property at the under-construction stage. In this way, you can arrange your funds easily and can go for a bigger property as you don’t have to pay all the money in 60 to 90 days period. Another benefit you can have appreciation in the property as most of the time property rates are 15% to 20% higher when the construction is complete.
Another way to invest is to buy a pre-leased property this will save you the trouble of finding tenants and you can start getting rental right from the first day of your investment.
If you are looking for a big-ticket investment you can go for DLF Prime Towers Delhi (Investment start from 1.60 cr onwards)
For small-ticket investment Bhutani Grandthum Greater Noida West (Investment starts from 26 lakhs onwards)
Investment in offices has to be managed differently than investment in residential property.
- While investing in office space your investment horizon has to be much longer
- There’s not much scope for flipping these office space properties
- Office units are mostly bigger than residential spaces, this means a bigger investment
I suggest you do your research before investing and if you have any query you can mail me at email@example.com or call 9599705565