Investment in commercial property is an excellent and wise option, which offers guaranteed good returns. It is also safer than other investments such as stocks or other kinds of investment. Although commercial investment requires larger capital than other investments, the long-term returns are good as per expectations because it continues to generate passive income.
Before investing your hard-earned money in a commercial property in Mohali, you must consider some vital factors.
1. Proper market research
Proper market research before investing in commercial property in Mohali is an essential part. It will help you to find the best property at your desired location whether that commercial property is used for yourself or resale purposes. Today, Tier II and III cities are becoming India’s real estate growth search engines and offer better returns on real estate. Be aware of upcoming real estate projects in your area so that you never miss an opportunity.
2. Review the location
Once you have finalized the location, you need to verify the features of the location such as road connectivity, railways, public transportation, metros, and nearby airports, and also make sure that the market is already established or newly developed.
In case, such kind of facilities are not present in the researched property, then this kind of investment is good for the long term and the best part is you will get the under-developed property at lower prices.
3. Types of commercial property
What kind of property do you want to invest in once you have reviewed the location and other connectivity modes/facilities? Today, commercial properties range from SCOs to retail shops, office buildings, industrial complexes, etc. It is also possible to earn rent from a residential property.
4. Consult an expert
New to the real estate industry and don’t have an idea where to invest, then definitely, you definitely have to consult with the experts. There are many consultants, lawyers, commercial property builders, and developers who can guide you through the entire investment. This will help you save time and bother and even save on travel and other costs.
5. Check the necessary approvals
Ensure the builder has received all the necessary approvals from the local authority. Check out this checklist:
- Sale Deed
- Mother’s Deed
- Building Approval Plan
- Khata Certificate and Khata Extract
- Encumbrance Certificate (EC)
- Betterment Charges Receipt
- Power of attorney (POA).
- Latest Tax Paid Receipt
- Check the RERA (Real Estate Regulatory Authority) approval
6. Evaluate the layout plan
Layout plans stand for the design and style of the building being constructed. A sound layout plan includes the plot’s size and the dimensions of the building lines. The layout plan also includes proposed roads, entry/exit gates, security systems, drain pipelines, water pipelines, public facilities, electricity connections, parking spaces, parks, etc.
7. Lease structure
Lease the property, then it will help you negotiate the tenure, maintenance, and repair of the property details, the lock-in period, and the taxes associated with the property. For a better return, a long-term investment is better than a short-term lease.
8. Choose the right builder
Loyal and reliable builders are one of the most important parts of buying a commercial property in Mohali. This will reduce the risk of losing money that is going to be invested. A builder with a legacy of delivering quality projects will help you to lease out the property easily.
9. Acknowledge the risk factor
As you invest, there comes a certain amount of risk. Before investing, beware of the risk factors. You should never invest if you can’t afford losses while running a business.
Credit is the most common risk in investment such as whether you can pay the rent on time and the other risk is location even if you don’t have an idea whether the location is good for your business or not.
10. Infrastructure
Before purchasing a commercial property in Mohali from a reliable builder such as VCS Builders, you should verify the physical infrastructure of the property. Basic amenities are available or not.
11. Neighborhood
Evaluate the neighborhood when choosing a business facility. When selecting a location, you should consider customers, suppliers, employees, parking, and nearby competitors and businesses. Environmental issues and the character of your community may also influence your facility selection.
If the market is already established, then you get the review or information of your neighbors. Sometimes, your neighbor’s business impacts your sales for many reasons.
It is a hit-and-miss system when the market is new or under construction.
12. Assess rental earnings after tax and insurance
Calculate your expected earnings from the business property if you rent. You can get the expected earnings from the current market rent. Keep in mind that it will increase in the future.
13. Value Assessment
The value of a property needs to be assessed before it can be purchased. The cost approach, the market approach, the income approach, or the sales comparison approach can all be used to calculate the value assessment.
Final words
It is good to invest in commercial property in Mohali. Investing in commercial property offers high returns, a low level of risk, and long-term value. In addition to tax benefits and security, commercial real estate offers high appreciation rates and continuous cash flow.
