Residential or Commercial Real Estate

September , 14
Residential or Commercial Real Estate

Which Investment Option will make your Money Grow?

Investment (n): the process or action of investing money for profit.

Okay, so you have a lot of money lying around in your bank account. One fine day, you decide to plant it somewhere fertile, water it every day and raise it into a thing of beauty.

Investment = Profits = Thing of Beauty = Joy Forever (sensibly said by Mr John Keats)

However sometimes, investments go bad. Then, you start losing money, so much that it hits you like a ton of bricks.

Louis Glickman, a very rich and esteemed real estate developer and philanthropist, once said, “The best investment on earth is earth.” And we couldn’t agree more. Nonetheless, the art of investment is a tricky one. There is a chance that the land you buy for investment might not be the most fruitful one on the block. The never-ending debate perpetuates to exist, making people scratch their heads in utter confusion.

Which one is a better investment option? Residential or Commercial Real Estate?

Assuming that you’re reading this because you are looking to invest in real estate, and would want nothing more for your investment to be profitable; let us understand the pros and cons of investing in residential and commercial property.

S.No. Basis Residential Commercial
1. Location Location is important; however, not the key decision maker, when looking at residential property for investment purpose. The success of your investment in commercial property is highly dependent on the location. The right location can turn your investment into nothing short of a gold mine.
2. Cost One can invest in cost effective residential property, and still avail ample profits. Commercial property is costlier as compared to residential property.
3. Chances of Availing Rental Higher chances of availing a rental income. Lesser chances of availing a rental income, as compared to residential real estate.
4. Access to Loan Ease of availing home loan, at a lesser rate of interest There is less ease of availing a loan for commercial property. The rate of interest for such an investment is high. It goes as high as 14%.
5. Return on Investment (Rental Return) Residential property can provide good profits. The profit percentage can go up to 4%. However, this profit is a lesser amount, in comparison with your commercial investment. A person can yield a high amount of return on their commercial property investment. This annual return can potentially serve an income of around 10% - 15%.
6. Risk Factor There is lesser risk involved in residential real estate, because the chances of you finding a tenant for your house are rather good, as opposed to the commercial property. Adding the cherry on top, your residential investment will not be typecast. Higher return, and thus higher risk taken. The risk lies in the time period till which your commercial property can go without the presence of a tenant. Moreover, a commercial property can be stereotyped as well. For instance, if you buy a commercial development in an area that majorly hosts beauty salons, then your property will be stereotyped, and expected to be opened for business as a beauty salon.
7. Property Acquisition 90% of your residential property can be acquired through a home loan. A minimum of 30% cash payment has to be necessarily made in cash for the acquisition of a commercial property.
8. Maintenance As the owner of the residential property, you would have to pay for all kinds of maintenance charges. The tenant won’t pitch in. As the owner of the commercial property, the tenant would have to pay for all kinds of maintenance charges. You won’t have to pitch in.

Do we come at a Conclusion?

Well, well, well…

It seems to be a draw, I suppose. Residential and commercial properties have their significant drawbacks and advantages, all at the same time.

Residential Real Estate = Safe Investment = Nevertheless, a profitable achievement

Commercial Real Estate = Higher Risk = Higher Profit/Return = Thing of Beauty

And we all know that a thing of beauty is a joy forever.

A Good Property Recommendation for Investment?

Oh, yes, we have that covered for you avid readers!

The Residential Recommendation

Located in the heart of Noida region, in Sector 120, is RG Residency, a group housing society that offers you the best of everything, such as, infrastructure, neighbourhood, ventilation, security, and a whole lot more. Built in a low-density population area, RG Residency is the ultimate residential property in Noida with ready to move-in apartments that are generously airy and ventilated. It’s time that you invested into a neighbourhood of happy families, where every moment is worth the celebration. Avail 3/3.5 BHK apartments at RG Residency at the most affordable prices!

The Commercial Recommendation

At RG Square, you’re offered lavishly vast office space at a location that houses ample, affluent suburban crowd. You could worry about a lot of things, but the parking space will not be one of those issues on your list of things to fret about. Sector 120 has wider roads, and thus, this place has lesser traffic. This commercial complex is THE hub of business for prominent brands like, Dominos, IDBI Bank, Apollo Pharmacy, Affinity Salon, and many more, coming soon.

So, now that your money is begging to be invested in real estate; the educated decision is yours. Which one will it be?

The riskless residential, or the chancy commercial?

Post a comment

Your email address will not be published. Required fields are marked *