Key mistakes to avoid while investing in Commercial Properties

Key mistakes to avoid while investing in Commercial Properties

Apart from a rise in demand for commercial properties, the reforms introduced by the Narendra Modi-led Union Government has made dealing in the real estate market simpler than ever before. So, if you wish to invest in the Indian realty market this year, then consider the key mistakes to avoid while investing in commercial properties.

Assess Proforma –Read the brochure or any other property-related document carefully as it gives complete details and earning potential of the commercial property. However, the word Proforma in the document sometimes is aligned with an asterisk or a star. So, before sealing the deal you must understand the meaning of this word. In Latin, it means for the sake of appearance. Thus, you must ask the seller about the accurate earning potential of the said property. Avoid the mistake of finalizing a commercial property purchase merely by seeing the word proforma on the document and save yourself from buying a property that won’t suit your business.

Abide Environmental Laws – A certain guideline is defined to carry out commercial activities in each locality. Thus, you must abide by environmental laws while choosing a commercial property. You are advised to take a legal opinion and check if such a particular business is allowed to be operational in the vicinity or not. This is a major thing to remember while investing in commercial property in India.

 Investor Checklist – Another important mistake to avoid while investing in commercial property is to go by what is listed in the offer. Being a buyer, ask for what all will you get after paying such a hefty amount. An investor must cross-check the facilities and discounts that can be availed by investing in commercial property. The Indian real estate has an array of options to choose from and hence you must assess, calculate and consider the option that offer maximum return against minimum investment.

Tenant for Commercial Property – If you plan to hire a tenant, then check for the current rental price in the locality. Also, figure out the estimated annual or monthly sale by the particular business in the area. You are suggested to fix the rental amount according to the sales ratio and 5:1 is perfect to follow.  Remember, no tenant will not pay high rental for a long time and will look for a new rental property soon. So, follow the ideal ratio and earn rent for a longer duration.

Keep the above-mentioned points in mind and stay away from committing mistakes while buying a commercial property. Remember, it is always better to recheck offers, legal guidelines, property titles, specification and unit values before making a handsome investment in commercial properties.

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