Guide to Invest in Commercial Property in Mohali – A Cheat Sheet

Investing in a commercial property in Mohali doesn’t have to be as complicated as it sounds. For most people, it is easy to simply follow the basic principles of investment and earn extremely high returns for that investment. That doesn’t mean that the investment is without a risk, however it does imply that those risks bring even higher returns. While making mistakes can be easy, if you stay diligent and avoid them you can be on the path to financial success with your commercial real estate portfolio. Here are some points to help you get started:

Keep the Location in Mind

The location of your property is everything that can either make it an amazing investment, or a disastrous failure. Commercial properties tend to provide you returns via rent and appreciation; both of which depend upon the location of your property. You should always look for locations where the vacancy is lower than 5%. This is a good sign that the supply is in check due to which tenants would be less likely to vacate. A higher vacancy would be bad for you since it gives tenants more options to move out to your competition and also a greater leverage while negotiating rents.

Quality

The quality of your property will also make a big difference on the tenants you can get. This

is mostly because bigger brands will always prefer moving to buildings with better quality. Therefore, before you begin to get returns from your property, you must invest in its quality. Moreover, multinational businesses are bound to pay premium amounts for good quality properties.

Demand and Supply

The demand and supply curves are probably the first things an investor learns to analyze. You should do this before committing to any investment as it will greatly affect your existing profits. Every city has a different supply vs demand curve since it has its own micro-market. You should check the same for Chandigarh before even thinking of purchasing the commercial property in Mohali as this would help you to have a clear vision of the kind of investment you need to make and the returns you could receive from it.

Market Rent

Checking the market rent is important to figure out your risk in the investment. If you charge a rent higher than the market value, your tenants will be very unlikely to stay for long. They may even try to renegotiate the rents or even delay escalation payments when they are due. On the other hand, choosing a building to invest in with market rent value and a good selling price in the near future would be a much better investment since it will allow you to have the safety of stable tenants.

Quality of Tenants

The quality of the tenants will also be a significant factor in the appreciation rate of your commercial property. Your first preference for tenants should be blue-chip multinational corporations as tenants since this will ensure that they pay on time, stay for longer periods, and pay higher deposits. Having them stay in your property for a considerable amount of time would also significantly boost its value.

Interiors

The interior fit outs in the property will make a big difference on the kind of tenants you can get and the terms of the lease. The time of delivery of the office is when you should check the provider of the interior fit outs. In most cases, the tenant would do the flooring, air-conditioning, and ceiling for the place. This is especially prevalent with large brands that like to fit out the place with their branding to keep things uniform and consistent. However, getting such a contract would require you to agree on a triple lease agreement.

Base Rent

Developers often tend to mislead investors by including fit-out rents while showing them the property. Be sure to read the fine print in such cases and check whether the rent being shown is the base rent or the fit-out rent. The main reason behind this is that the fit-out rent is much higher than the base rent, and is also only payable for five years or so.

By using the above helpful tips, you can make a sound decision when investing in a commercial property in Mohali. Most of the decisions require thorough research and it is advisable that you hire a real estate agent to help you with these decisions.

Also See: Upcoming Projects in Mohali