The crisis of COVID-19 significantly affected both the business and the real estate market. And the main question facing “micro” and “middle” investors is which is more profitable: commercial or residential real estate. The answer to it will not be unambiguous.
Residential real estate is clearly segmented: primary and secondary markets, apartments, luxury apartments, houses and cottages, economy, business and premium classes. Segmented and commercial real estate:
Narrow-profile buildings: cafes, restaurants, banks, etc.
Therefore, to decide whether to buy commercial real estate, you need to decide: will it be an investment in your own business or a rental income?
It is logical that the person who acquires the premises for the business is able to calculate their income and expenses. But in practice, many representatives of small businesses (especially in the retail sector) do not always calculate whether their store will make a profit if the company has to pay rent + utility bills and other expenses.
What does this mean? The store pays off. But investments in the room do not pay off. Is such an investment profitable? No, although outwardly everything looks quite acceptable. This is “business for business.”
The money spent on the purchase of their business center in Delhi could bring much more profit if put into circulation.
The second problem that the owner will face is the inability to assess the potential of the area. He does not know (or does not take into account) which objects will be erected here in the next 3-5 years.
Meanwhile, the opening of a large hypermarket in the neighborhood, the transfer of a bus stop, the closure of the metro exit can “kill” your own business.
Premises as rental income
In this case, the investor expects to receive monthly income from the rented property in Delhi, while the room remains its asset. For a long time, residential apartments remained the most popular type of such investments, however today their payback period has increased significantly, and profitability has fallen.
Commercial real estate wins in this regard: its payback period is 7-10 years against 20 for apartments. But both options have their pros and cons.
Entrance ticket to this market is lower than in the commercial segment. Traditionally, apartments are bought for children, and while children grow, rents are a good help for the family budget.
A similar option is also chosen by people who want to ensure a quiet retirement life- they rent out their property and live on rent.
The advantages also include the fact that professional experience for renting an apartment is not necessary (which cannot be said about the store or office). Moreover, companies that professionally manage residential real estate operate on the market today- if necessary, they can be entrusted with the management of the apartment.
The third advantage is liquidity. An apartment or apartments is easier to sell. How easier it is to purchase housing at the construction stage, which means to save on the purchase. The fourth advantage is the ability to rent housing.
Is it profitable to buy commercial property?
In terms of payback – yes, of course. With one caveat: if this property is liquid. The trend of the last 20 years has been the purchase of apartments (or premises) located on the first floors of houses under construction.
This article is very attractive. Those who need this information about it. It's very informative and understandable for those all. Buy House in DwarkaReplyDelete
Nice post! This is a very nice blog that I will definitively come back to more times this year! Thanks for informative post.Delete
Temporary Resident Permit in Canada
The content was really very interesting. I am really thankful to you for providing this unique information. Please keep sharing more and more information. Low Income Apartment For Rent in ARKANSASReplyDelete
Thanks for sharing the best information and suggestions, it is very nice and very useful to us. I appreciate the work that you have shared in this post. Keep sharing these types of articles here. Best Property Managers AtlantaReplyDelete
I read your post and got it quite informative. I couldn't find any knowledge on this matter prior to. I would like to thanks for sharing this article here.Real estate appraiser AlbertaReplyDelete
This is important information which is shared by you. This info is meaningful and important for everyone to increase our knowledge about it. Always keep sharing this kind of information. Thank you. Palo Alto CA homes for saleReplyDelete
This post is really awesome. Genuinely i like this blog. It gives me more useful information. I hope you share lots of things with us .Home Selling Tips SaskatoonReplyDelete
Great analysis on residential and commercial real estate. As a company that develops HOA website for homeowners community, I appreciate your curated content and insights you share.ReplyDelete
Wonderful post. your post about Real Estate is very well written and unique. Thank you for sharing this post here. sample rental agreement termination noticeReplyDelete
You have a genuine capacity to compose a substance that is useful for us. You have shared an amazing post about rental agencies. Much obliged to you for your endeavors in sharing such information with us. rental agencies vancouverReplyDelete
You have provided valuable data for us. It is great and informative for everyone. Keep posting always. I am very thankful to you. Rental Management CoquitlamReplyDelete
Commercial real estate investment can be much more profitable than residential real estate. For example, you can charge much higher rents per square foot in desirable properties, because the tenants are generating revenue from the property. https://www.homestagingaucklandprosnz.info/ReplyDelete
I owe you a debt of gratitude because the article you've posted here real estate agents chehalis wa is fantastic. I learned something useful from this article. Thank you for sharing that. Continue to post.ReplyDelete
You are doing excellent work. You have posted such a great article. It is thoroughly informative and knowledgeable.Port Alberni Real Estate Agents. Back message.ReplyDelete
Great information, this information is necessary and essential for everyone. I am thankful for you for providing this kind of good information. Property Valuation ServicesReplyDelete
I am very thankful to you that you have shared this information with us. I got some different kind of knowledge from your web page, and it is really helpful for everyone. Thanks for share it. Read more info about Edmonton Residential Tenancy Dispute AgentReplyDelete
You are providing essential knowledge. It is helpful and important information of Concrete contractors San Antonio TX for us and everyone to increase knowledge. Continue sharing your data. Thanks once again for sharing it.ReplyDelete
Thanks for publishing such best knowledge with us. You are doing such a great job. This info is very helpful for everyone. Keep it up. Thanks. Read more info about we buy houses austinReplyDelete
I am heartily thankful to you for sharing this best knowledge. This information is helpful for everyone. So please always share this kind of knowledge. Thanks once again for sharing it. pls visit our website hoa management san antonioReplyDelete
You have done good work by publishing this article here.property tax advisors for residential property in horncastle I found this article too much informative, and also it is beneficial to enhance our knowledge. Grateful to you for sharing an article like this.ReplyDelete
You are providing good knowledge. It is really helpful and factual information for us and everyone to increase knowledge. about Industrial Valuation Services .Continue sharing your data. Thank you.ReplyDelete
You're amazing since the article you've written is both engaging and informative. Thank you for sharing about loan broker Singapore. Keep up the good work.ReplyDelete
Very well written article. It was an awesome article to read. about Multi family home seller in Fort Worth Complete rich content and fully informative. I totally Loved it.ReplyDelete
I read your blog in which you shared your best knowledge and great tips about Best Real Estate Agent Montreal. I really need this information. thank you so much for this knowledge. Keep sharing.ReplyDelete
Excellent information, I am heartily very thankful to you for providing this kind of knowledge. This information will always help to everyone for gaining knowledge. Always keep sharing. Thanks for share real estate value estimator.ReplyDelete
I generally check this kind of article and I found your article which is related to my interest.Maple Ridge Townhomes for sale Genuinely it is good and instructive information. Thankful to you for sharing an article like this.ReplyDelete
You have provided valuable data for us. It is great and informative for everyone. Keep posting always about Realtor in the Bronx. I am very thankful to you.ReplyDelete
Your blog contains lots of valuable data. It is a factual and beneficial article for us. Thankful to you for sharing an article like this.Westside Top Realtor SpecialistReplyDelete
This article provided me with a wealth of information. The article is both educational and helpful. Thank you for providing this information. Keep up the good work. House Rent Agreement RegistrationReplyDelete
You wrote this post very carefully. The amount of information is stunning and also a gainful article for us. Keep sharing this kind of articles, Thank you.Coos Bay RealtorsReplyDelete
Excellent post. I really enjoy reading and also appreciate your work. This concept is a good way to enhance knowledge. Keep sharing this kind of articles, Thank you.South Tampa RealtorsReplyDelete
It is what I was searching for is really informative. It is a significant and useful article for us. Thankful to you for sharing an article like this.Vancouver Westside townhouse for saleReplyDelete
I read the above article and I got some knowledge from your article. It's actually great and useful data for us. Thanks for share it.Gibsons Sold ListingReplyDelete
I just need to say this is a well-informed article which you have shared here about hoodies. It is an engaging and gainful article for us. Continue imparting this sort of info, Thanks to you. Upper Lonsdale house for saleReplyDelete
You have worked nicely with your insights that makes our work easy. The information you have provided is really factual and significant for us. Keep sharing these types of article, Thank you.Whitby homes for saleReplyDelete
Your blog took to me an entirely significant spot. It is a beneficial and factual article to enhance knowledge. Thanks for sharing an article like this.Pass RES ExamReplyDelete
Heaps of important information can be taken from your article about a sleeping cushion. I'm glad that you have imparted extraordinary data to us, It is a profitable article for us. Appreciative to you for sharing an article like this.Williams Lake Real EstateReplyDelete