Great Investment Ideas for the year 2020

The best investment idea for this year is to invest in commercial real estate. Since there is an economic slowdown, the prices of commercial properties to have slashed down, so it is the best time to buy commercial properties. From crunching numbers to raising capital, buying commercial real estate will require more out of an investor. Lets now discuss the pros and cons of commercial property investment in Kochi.

1.Rental yields

The best reason to invest in commercial over residential properties is its rental yield. A property with a 10% rental yield can help to serve the Ioan against the property. Once the loan is over, the property is free for the investor. Moreover assured returns help the investor to survive bad times. If you buy the right property at the right location at the right time, you can have a rental yield of up to 13-15%.

2.Tenants

Quality tenants like corporates, banks, etc can attract more such tenants in the vicinity creating a ripple effect and helps in better future rental yields.

3.Zero furnishing cost

Furnishing costs for commercial properties are nil. You can hand over the raw property to the tenants. Usually, tenants like corporates and banks like to do furnishing according to their choice.

4. Consistent and regular returns.

Normally lease agreement for a commercial property is for a term of five years that carries a clause of annual increase irrespective of market conditions. Therefore returns from commercial property are assured in nature.

Now let’s discuss some cons of commercial property investment.

1. Costly and higher loan rate

Commercial property investment is costly compared to residential properties. The interest rate is not fixed by banks but it is 1.5. – 5 % more than the home loan rate.

2. Buying process

The overall buying process is a bit complex. Buying commercial properties requires thorough market research and meticulous planning. Any misjudgment can be fatal for the investor. The location and its future growth potential to decide one’s future returns.

3.Performance of the economy.

Any fluctuation in the economy affects the fortune of commercial properties. The weakening of the economy reduces demand for commercial spaces.

We hope the above investment ideas and its pros and cons would help you in giving you better clarity on your investment in 2020. For more details and investment, ideas contact Mr. Jacob Thomas- Property management consultant in Kochi.