Real estate is considered a good investment due to various reasons. It provides potential long-term return through rent and capital appreciation. The rental income acts as a hedge against potential economic shocks. Moreover, real estate investments do not follow any business cycle hence they are less correlated with other investments.
There are many ways to invest in real estate in Pakistan. Investments in commercial properties such as shopping malls and other commercial real estate projects have garnered a great deal of interest in the last decade or two.
In this article, we’ll walk you through the various benefits of investing in commercial properties in Pakistan.
The most important benefit of investing in commercial properties is that it provides you with protection in case of a downturn in the economy with a steady cash flow i.e. rental income. Furthermore, even if your commercial investment is not in use, real estate always appreciates, and hence your investments will not lose any value over time.
A Greater Return On Investment
A carefully planned and well-designed shopping complex in a densely populated area is likely to generate a high rent in comparison to other residential properties. Apart from rental income with adequate maintenance and proper checks and balances the appreciation in the value of this commercial property will know no bounds.
It is a win-win situation for investors if they plan carefully.
When compared to other types of real estate investments commercial properties tend to yield lower risks. The main reason is that the magnitude of investment is very high therefore many stakeholders are involved which ensures proper checks and balances of everything going on.
Unlike residential properties where you are the sole bearer of all the risks related to your investments. Commercial properties tend to be less risky because many parties are involved.
Better Rental Agreements
In a growing economy like Pakistan where people take the initiative of starting their businesses, you will likely be able to find a tenant for your commercial property rather than your residential one. Moreover, commercial properties tend to have a longer rental agreement ranging from 3 to 15 years whereas residential agreements don’t span that long and hence you have to go through the tough process of finding tenants once again.
Greater Efficiency And Maintenance
Since there are many parties involved most shopping malls or commercial properties tend to have separate management whose objective is to look after the operations of the commercial properties and try to allocate resources in the most efficient way possible.
The management is responsible for marketing, advertising, and ensuring that most if not all units are utilized. Furthermore, the management is also tasked to ensure cleanliness, payments being made on time, and no mishaps.
Greater Professional Ties
By investing in commercial properties you will create ties with various professional and business personnel in Pakistan. Most MNCs and renowned retail outlets tend to operate in shopping malls and you are likely to create ties with their managers and their owners by renting out your properties.
These businesses are likely to bring in a great deal of revenue and will greatly enhance your image and reputation which will go a long way.
Exchange of hands
Unlike residential properties which are considered illiquid. Commercial properties have greater liquidity than residential properties. In most cases, if your investment is in a less populated suburb of a city, chances are it will be very hard for you to find a buyer and sell your property that’s not the case with commercial properties.
Most shopping malls have an active investor base and people tend to exchange their properties a lot due to various reasons. This is because most commercial properties, shopping malls, etc. are located in a visible and populated area of the city people tend to notice them easily and hence it becomes very easy to find a suitable buyer at a suitable price in a very short amount of time.
There are various other advantages of investing in commercial properties. Some countries even provide tax breaks or credits to owners of such properties. We hope this article provided you with adequate insights regarding the benefits of investing in commercial properties.
If you are someone who is thinking of investing in commercial properties, get in touch with reliable real estate agencies like Aetmaad. Why? Because every step you take towards buying a property you need a guarantee and in this case trust Aetmaad, Kyun Keh Aetmaad Zaroori hai!