Introduction –
“Rental yield” attracts the imagination of investors across India, more attracts the investors in the metro cities. When thinking of Investment by investors point of view, their first view is to how much I get in return in the mean of Rent. So, the compression goes between either go with the Residential properties or go with the Commercial properties.
Why Pre-Leased Commercial?
Now a first question comes in an investor’s mind is to why go with the Pre-Leased properties? The answer to this is simple No Waiting and No Chasing with ‘ZERO’ waiting for your ROI to start off. The reason why the smart investor or an investment company goes to invest in a commercial pre-leased property.
Talking about the Benefits –
- Assured Returns – In a Pre-leased property you don’t have to wait or look for to rent out the property, so the returns start from very 1st day of your purchase, this means there is a zero-waiting period for Return on Investment (ROI).
- Fixed Monthly Income for long period: Since these properties are already occupied by tenants at the time of purchase, a lease agreement is already signed, security deposit collected, and lock-in period defined. Hence, a monthly return is fixed and assured. Hence It is a very safe investment.
- Lock-in Period: In every leasing agreement there is a lock-in period is defined. Lock-in period is the minimum time frame in which the tenant cannot vacate the property. The lock in period usually is 3 years which is a good to get a good return on safer terms.
- High Capital Appreciation: The Value of your property will increase over the period. It is also observed that commercial properties get a higher appreciation compare to other investments. Not only you benefit from the assured rents, but also from the value appreciation of your property.
- Risk Factor? – Now talking about the risk factor in commercial properties, the property is already occupied for a specified duration, which means that returns are guaranteed at least for the next few years and the required legal documentation has already been done. It is a safe long-term investment for sure.
- Bank Loans: Banks & Financial institutions lend loans easily for pre-leased properties, even to the tune of 90% of the cost of property. For this purpose, they use the ‘Future Rental Discount’ tool, which serves in facilitating a seamless property buying process.
While selecting or going for a Pre-leased property – the quality of tenants and their likely period of stay. One should also check the vicinity and all paths approaching the property. Lower the distance from major locations like highways, railway stations, bus stands etc, better rent it commands.
We at Floorrise give a best fit projects in and around pune, so please if you have any information required, please feel free to get in touch with us.
