Investing in real estate has evolved over time into an innovative form of financing. One of the most important benefits of real estate investing is the potential for secondary revenue.
Money invested in real estate and property is considered one of the best investment decisions because of its guaranteed, reliable and undeniable earnings and higher returns on investment. Due to the fact that it is a tangible right, it provides extended protection as well as the benefit of regular revenue through rental properties.
Most investors have a hard time deciding between investing in residential and commercial real estate. While both are common financial options, the RoR and the amount of initial capital required can vary greatly. They provide various income opportunities to the customers. Because each type of real-estate investment has significant benefits, there are certain aspects that need to be evaluated before making any real-estate investment, such as tenant availability, location, running expenses, maintenance, leasing agreement, And so on.
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According to a study, India’s commercial real estate market is valued at USD 20.71 billion for the current year, with a CAGR of over 21.20% expected during the launch era. Despite its teething issues, developers and customers are flocking to the commercial property market mainly because of the transparency and affordability of the sector, which has attracted an increasing amount of foreign direct investment (FDI). The demand for commercial real estate is being driven by the economic development of the country.
The Indian workplace real estate market is witnessing a rise in demand for open and co-working spaces. Professional services employees have emerged as the primary residents of these flexible workplaces. They are focusing on the capabilities of customizable workforce, which has increased the demand for flex chairs. For example, Avanta has leased 100 seats to Sage Publishing (the US-based Sage Group’s worldwide distributor of books and scholarly journals, which has secured adaptable office space in the co-working center in Delhi).
In comparison, the India residential housing market is valued at USD 178.83 billion this year and is expected to grow at a CAGR of over 19.58% over the projection period. Rapid urbanization has created a huge demand for affordable homes in many regions of the country. Furthermore, the demand for lavish and spacious living spaces has increased, partly due to the desire to attain a better lifestyle.
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According to Nakul Mathur, Managing Director, Avantha India, “Commercial spend continues to beat domestic property, in terms of rental return on investment (ROI). Long-term leases and contracts guarantee that real estate owners generate revenue receives a steady flow of capital. In 2023, commercial real estate investment will be concentrated primarily in offices, co-working areas and low-cost stores. Today, fractional ownership in business real estate is a growing trend. The entire sector Instead of buying, the investor invests in a part of it and gets more returns.This fractional ownership trend will continue till 2023.
“The commercial property market in the nation is expected to reach unprecedented levels in the year 2023, thanks to certain trends shaping the future of the sector. This segment of the market is now one of the most preferred to experience extremely positive growth in both residential and commercial real estate. Commercial properties not only provide profitable leasing returns over the long term, but they also act as a force multiplier by encouraging the growth of the real estate environment. said Anurag Goyal, director of Goyal Ganga Development.
He later added, “Financial experts estimate that the country’s real estate market will grow at around 13% CAGR between FY2022 and FY2023, owing to high demand. The commercial property sector is the engine that drives growth and sustains the overall real estate industry, and it is set to have one of its best years in the future.
Gurmeet Singh Arora, National President, Indian Plumbing Association said, “There has been a 51% increase in residential purchases in the post-Covid-19 era. Experts estimate that prices across India will increase by about 7.5%, and an assortment of other economic signs point to favorable growth in 2023. This real estate is one of the most prominent economic pillars of India. Rapid urbanisation, changing consumer behaviour, changing regulations and the impact of the pandemic, are all driving the growth of this sector.”
“Commercial real estate has high revenue potential because tenants typically sign multi-year contracts and charge higher rents than residential tenants. In addition, commercial real estate can enrich a financial portfolio and potentially reduce tax Hence, it is an important and ever-changing sector that needs careful evaluation as well as expertise from investors, builders as well as other industry professionals.”, Suren Goyal, Partner, RPS Group Said
Investors should consider all factors before making a choice, including funding, connectivity, rent, maintenance, running costs, tenant availability and market conditions.