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We all know that location is one of the most important aspect of real estate. As an investor one needs to invest in growing market with planned development of infrastructure. But it is also important to evaluate a commercial property on the following parameters for investment purpose.
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How To Select The Right Commercial Asset for investment? It is Important to evaluate a commercial property on the following parameters for investment purpose: Step 1. Yield Rate One needs to understand current yield rates of the subject, market for comparable properties and likely movement in future. Step 2. Market Conditions If the property is signed above the current market rental then in future it is likely that tenant may renegotiate with the owner & if it is below market rent levels then possibility of higher yield in next lease cycle. Step 3. Quality of Tenant If the Client has invested on fit-out and other improvements on the property, then it is likely that the tenant will continue in the property for longer term. Step 4. Lease terms The parameters to consider are lease term and lock-in period but there are other terms including status of the facility at the time of exit of the property and others. Step 5. Adherence to the Regulations It is important that the property is legal and built as per the local laws. One needs to hire a good Due Diligence firm to understand the risk if any with the ownership of the property. https://yieldspace.com/blogs/how-to-select-the-right- commercial-asset-for-investment
