If you are thinking of earning by investing in property, you must be confused whether you should invest in residential property (house, flat) or commercial property (shop, godown). The answer to this question is not so simple. Both these properties have their own advantages. However, if your main objective is to earn a regular income from the rental, the results may be a little easier to achieve.
Despite this, one should not focus solely on rent to make a decision. Apart from this, there are some other things that you should consider before proceeding with the investment. Let us know some of these important issues including rent.
The first thing is the rent which is the top point of discussion before investing. Commercial property rents are generally higher than residential properties. Although it depends on location and size, if the rent is compared between residential and commercial properties in the vicinity of an area, commercial property will often come out ahead. However, the screw here is that if the market for that space slows down, commercial property rates and rents will decrease while residential property rents will remain unaffected.
The rent of a commercial property may be higher than that of a residential property, but the landlord is not responsible for the maintenance of the residential property. On the other hand, in commercial property these costs are also borne by the property owner. It can be a burden like an additional expense.
If the commercial property is at a prime location, you will easily find tenants there. But if the property is off the market or in a place where buyers don’t like to go, you will have a hard time finding a tenant. Residential property is also at the top in this regard. Here you will find tenants very easily.
Apart from this, buying a commercial property is a big task in itself. Overall, the higher the commercial property rent, the higher the risk. Before investing you have to see how much risk you are willing to take.