In the wake of the second wave of Covid-19, most of us are once again confined to our homes. Apart from the safety measures which are important, this lockdown is high time to predict the future and getting prepared for the action in the newer normal. Real estate, as we all know, is one of the safest investment asset classes for diversifying the portfolio. Even in recession and after the first wave of Covid-19, the real estate sector managed to withstand the pressure and delivered greater Returns on Investments (ROI). But real estate sector is one of the highly competitive investment classes as well. By making the right move, your efforts are rewarded with huge returns, but most of it requires time, energy, and persistence. Red Maple – Delhi-NCR’s most experienced real estate consultancy is here to grab your attention towards some of the factors that make your calculations right for CRE investments.
Set the Priority
Are you planning to have price appreciation or steady cash flow? Set the priorities right before making the move. If you are looking for appreciation, then you need to plan properly and wait patiently for the market to perform. However, the returns are huge for appreciation. Cash flow on the other hand is relatively a safer option, however, make sure it is an equity investment and not a debt investment.
Ensure that you underwrite the property well enough to closely evaluate and clearly mention the deals involved in the property. The asset and the profitability equations should be clearly evaluated by an underwriter on the basis of accurate data. By strongly underwriting a proposal, you can get a clear idea of the perks and risks involved in the deal.
Passive or Active
Decide whether you want to be an active or passive investor. The active investor means you become the landlord of the projects invested. You will be dealing directly with the tenants in terms of renting or leasing. You will have to commit time and headaches regarding the paperwork. A passive investor on the other hand will have a sponsor or mentor who does care about the investment on behalf of you.
Before investing in a commercial property, think about reflecting on your own portfolio wish. Like already said – evaluate the basic parameters like cash flow, appreciation, reaping tax advantages – or looking for a complete investment package? Once you are able to clearly differentiate your investment goals, you can weigh the pros and cons of commercial real estate investments more effectively.
As an investor who is looking to target the commercial real estate segment, you need a broader understanding of the market. There are various important factors like supply and demand chain, population explosion, audience diaspora, age, and employment are necessary to be observed and studied with due diligence.
Now if you planning to make a move to the Commercial Real Estate sector, then an expert property consultant can help you in the decision-making. Talk with RedMaple property consultants today itself!