Is it reasonable to invest in the real estate market in 2021?

 

Is it reasonable to invest in the real estate market in 2021?

 

 

Both commercial and residential real estate have their advantages and disadvantages. Commercial real estate costs slightly more than residential real estate, but offers higher rents. On the other hand, residential real estate is bought mainly for end use and for long-term investments. So should anyone buy residential or commercial real estate?

 

Demand for commercial real estate has increased gradually, with approximately equal supply; As a result, prices continue to rise. Currently, capital increases and commercial property rents are increasing. "Residential real estate has been discontinued mainly due to the impact of regulatory changes in recent years," said Narddeko President Nranjan Hiranadani.

Returns on Investment 

Residential facilities are purchased primarily for personal use and to generate the best possible income by renting residential facilities. Another reason to attract investors is that real estate prices have risen over time.

Real estate that can generate real estate is usually office space, warehouses, commercial, industrial and institutional real estate. Regular rent is an important factor in forcing investors to buy commercial real estate and the price increases are high.

Commercial properties are a good investment opportunity for a fixed income because they offer high rents compared to residential properties. Century Real Estate manager Ravindra Pai said that in the economic downturn, residential properties are far more than commercial properties.

However, rental income and price increases depend on many factors, such as current market trends, location, social and physical infrastructure. These are the main reasons to appreciate commercial and residential properties.

The housing market has now started to rise, although it will take some time to estimate prices. In the field of commercial real estate, Grade A office real estate has produced higher returns. "It is estimated that the overall total return of residential real estate is about 3-4% per year, while the total return of commercial real estate is 8-10%," Pai added.

Arrive at REITS

India saw the first real estate acquisition (REIT) announcement by Blackstone and Embassy Group in March 2019. The success of this event led to new investments in national land market. in the commodity market.

A survey by JLL shows that 294 million sq ft (REIT table assets from such investments in 2018 and included in the REIT Recreation Center) of office space will be eligible for REIT. This would mean a potential investment of $ 35 billion. This is certainly a great opportunity for Indian investors.

Due to Diligence

Investment is an opportunity, but it has its risks. So before you invest, you need to calculate and follow the steps carefully. Before investing in commercial or residential real estate, you need to look at productivity, location, previous price trends, communication, employment opportunities, and more. You also need to make sure that the real estate for the projects under construction is registered with RERA.

Main market

Some of the major markets for investing in the commercial and residential markets are Bengaluru, the Metropolitan Area (NCR) and the Mumbai Metropolitan Area (MMR). Employment opportunities are increasing and multinational corporations that occupy large lands in Indian cities are fueling the growth of the commercial sector in tier 1, 2 and 3 cities as well as large cities. The residential market is also witnessing demand from buyers with good connectivity and a job hub nearby.

"As a rule, the best subways, such as Delhi, Mumbai and Bengaluru, have become a favorite destination for investors, a trend that has become apparent in the last decade. Metro cities, along with neighboring districts, have received three-quarters of the investment over the past few years. years. in the past, ”Hiranandani added.

Investors should compare their options to price movements before investing in commercial or residential property. Due diligence is required in terms of price, location and property prospects before making a purchase.