Real Estate has always provided one of the best ways to get some excellent returns on the money that you invest in. In todays world, after the recession hit in 2008, there are still a lot of businesses who are trying to get back on their feet after being hit really badly. One of them is the real estate business. The business has seen its ups and downs over the past and it is still a business that can turn volatile at any time. But it is still a good time to invest in real estate, say experts.
Only residential poses a risk:
Experts have claimed that investing money in only residential blocks can cause a risk of losing your money and the same does not hold true for commercial spaces. Commercial properties pose quite a good deal if you are looking to make some good returns on your investment. This proposition is however good in a short to medium term of time. The valuations that are available for commercial properties are attractive when compared to the 2007 peak, which was just before the time the recession hit the world.
is expert in Office spaces have seen a lot of demand over the past five to six years. Businesses in India are slowly starting to pick up the space and there are a lot of start-ups that are looking to get some good office spaces to get their businesses up and running or take them to the next level. There is an excess requirement or demand for office spaces around the country and this could be a great opportunity waiting to happen for those who wish to get some decent returns on their money.
Growth in the commercial sector:
There has been a massive spurt in the growth of properties looking to get their businesses started up. These businesses have led to the growth and development of many commercial spaces around the country and a 9% increase in the supply. Cities such as Bangalore and Delhi NCR have seen their demands for a commercial space grow almost exponentially over the past few years and this has been the cause of a lot of investment coming in from various sectors in the country.
Due to this oversupply, there has been a drop in the prices and also in some areas, this has caused the residential prices to rise above the commercial properties, which was something that seemed almost impossible a few years earlier. Also, capital values and rental yields in the commercial segment have been hit by the recession and prices have fallen steeply over the past six years.
A one time thing:
Such a steep fall in prices is something that is unlikely to be seen again, say experts and they also claim that people will hold on to properties in order to gain good returns on their investment. Investors who are looking to get some good profit on their money are mainly targeting areas such as rental income to get back most of their money. Rental yields have improved over the past few years and the prospect looks fresh and promising at the same time.
Despite the excess supply in the commercial sector, there has been an increase in the net absorption rate due to factors such as vacating and construction of newer properties in and around the area. Vacating rates have also fallen down in most of the key offices around the country and this is a positive sign for those who are looking for newer ventures in the real estate market to get some good value for their money.
REITs are a good idea:
Real Estate Investment Trusts are something of a game changer that collects money from many small-time investors and uses them to invest in commercial properties which are on the expensive side. Normally commercial investments are very hard to own individually, but REITs allow investors to get some good money from the little investment that they make and the trusts also are able to get a share of the profits that are accumulated over a period of time from the rent. Rent is one of the key aspects to getting money from commercial sectors and it looks to be a bright time to invest in some.