5 Ways to Get Into Commercial Real Estate

1. 5 Ways to Get Into Commercial Real Estate Jul 5th 2017 at 10:46 PM Real estate has always been an integral part of one’s investment portfolio, not only because of the potentially high returns but also the associated pride of ownership. But every investment in real estate does not fetch good returns. There are numerous instances where investments in real estate have turned sour for investors. But residential and commercial real estate respond differently to situations. A commercial property could be a small shop in a neighbor-hood, housing complex or a mall, a small office space, or even a joint investment in a bigger office space. Each of these should be looked at from different perspectives— investment amount, tenant profile, returns, exit options and associated risk. Shops Shops can be an entry point for a new investor. One can buy a shop in a neighborhood market, a residential housing complex, high street area or a mall. Shops can be let out to be used as ATMs, retail outlets or to professionals such as chartered accountants and doctors. While investment amount will depend on size of the property, location matters. For example, a small shop in a high street area may cost more, and rental yield could be lower, but tenant profile will be higher, vacancy risk lower, and you can enter into long-term lease agreements. Offices Many companies are in an expansion mode and small enterprises are setting up offices in business hubs. However, location plays a vital role. For the conservative investor, ready commercial office properties may be suitable as it will give steady cash flow through an ongoing rental yield, as well as expectations of future appreciation. Land parcels Typically, plots are not sold by established developers and you may have to approach development authorities or small plot developers. Going through real estate agents can be a risky approach. Be careful about the titles since there are many fly by night operators in this segment. Private equity (PE) funds PE funds buy stakes in residential or commercial projects, by tying up with developers, usually at the initial stage of a project. They exit once the project takes off and prices appreciate. PE funds are more for high net worth individuals as one has to invest at least a couple of crores.

2. Real estate investment trusts (REITs) REITs now have pass-through taxation—the investor pays the tax and not the fund. This has made them more attractive. REITs are similar to mutual funds—money is pooled in from investors and the corpus is invested, primarily in completed, income-yielding real estate assets. The revenue or income generated is then distributed among investors. Now Mapsko Groupis here to launch best commercial projects in NCR. For more information you can visit our website www.mapskogroup.com and can contact on our toll free number.