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Investment In Commercial And Residential Property: Which One Yields Better Returns?

Real estate has been the beacon of investment in India. Investment in commercial and residential property is regarded as a high-grade investment as it offers a tangible natural asset.

In the past ten years, there have been significant shifts in commercial and residential property investment, making real estate an even more rewarding investment. As India’s economy has risen in recent decades, the retail real estate sector has expanded significantly. As a result, more business houses have been established in India. In the previous decade, the number of new firms in the country has increased seven-fold. The demand for Commercial Property in Gurgaon has surged as a result of this increase. On the other hand, residential properties have proven to be a long-term investment option because they are typically purchased for the buyer’s use or as a long-term investment. The question that arises is where one should invest – Commercial or Residential?


Interest Rates on Loans: If an investor wants to borrow money for a commercial venture, he must be willing to pay a slightly higher interest rate. Home loan interest rates are substantially lower than retail space, which are 1.5-5 percent more. The loan component must be considered when deciding since it imposes a lower limit on the expected returns. Consider the following example: Property Price: 10 crores, let’s suppose we obtain a loan for five crores, the interest rate is 10%, thus the interest cost, if we only pay the interest cost, is 50 lacs per year.

This indicates that we require a home with a rental of more than 50 lacs per year, including upkeep charges; otherwise, we will lose money. If the rent is lower, we’ll need to lower the debt component of our capital structure and possibly bring on a partner.

However, to generate a capital gain, we need a year-over-year increase of 5%, which is the inflation rate. Even if the value of the money received from the bank increases by 5%, we will still be profitable because the interest will be paid out of the rental income.

As a result, adequate planning and research may be able to reduce the danger of debt.

Increased Effort: Although a commercial property will generate a better return than a residential property, it will necessitate a significant amount of effort on the investor. To earn a more considerable rental income, the property must be favorable where commercial property demand will be higher. The investor must check the creditworthiness and profile of the renter. The tenant’s business should be solid and long-term.

Introduction of REITs: Investing in commercial real estate can be challenging, so an innovation called REIT, or Real Estate Investment Trusts, was created to make it easier. REITs were first launched in the United States in the early 1960s to revolutionize the real estate industry. REITs bolster the advantage of investing in commercial property over residential property.

Critical Markets for Investments: Delhi NCR, Bengaluru, and the Mumbai Metropolitan Region (MMR) are three of the most important marketplaces for commercial and residential property investment. Commercial Property in Gurgaon is booming, thanks to more excellent job prospects and multinational corporations (MNCs) occupying large tracts of land for their operations. Residential real estate also sees a surge in demand for sites with adequate connectivity and proximity to key employment centers.

Investment in commercial and residential property: Conclusion

Any investment is a good investment if it is made in the right way. Commercial and residential property investments have distinct advantages and disadvantages that make them easily recognizable. It is dependent on the investor’s expectations as well as his financial ability to pay. With the real estate market increasing rapidly, commercial and residential property investments have a bright future, making it a win-win situation. An investor may even create a portfolio that includes investments to diversify risk and ensure a more significant return.

Note of Precaution: The investor must carefully check all the documents with due diligence before investing in any such arrangement.

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A look at Top Luxurious Residential Localities in Gurgaon

Gurgaon has evolved as a millennium city with a great future ahead of it. Over the last few years, the demand for Residential Property in Gurgaon has skyrocketed. The city is gradually becoming famous for luxury projects due to modern infrastructure, excellent connectivity, and an economically stable structure. Individuals are willing to invest generously to enjoy the best services and amenities. The Gurgaon property market offers an extensive range of luxury developments for high-end customers, with distinctive designs, great architecture, ultra-modern amenities, and many other benefits.

Today, the city is rising with urban colours and a vibe similar to that of foreign cities. Gurgaon’s luxurious residences are enticing homebuyers with their fast-paced urban expansion. As a result, both investors and purchasers consider Gurgaon a desirable location to invest in real estate.

The following are some of the factors which have influenced the rise of luxury housing in Gurgaon:

  • The number of High Network Individuals (HNIs) and Non-Resident Indians (NRIs) is increasing.
  • The residential, office, hospitality, and retail sectors in Gurgaon have all seen solid demand. It is a hub for many multinational companies and IT and IT-enabled services, which is driving real estate demand.
  • Proximity to Delhi and the IGI Airport, nearby industrial zones, Metro rail network, excellent connectivity, superior infrastructure, and decent transportation facilities are all advantages.
  • Gurgaon is anticipated to be a popular investment destination for end-users and investors since it offers high returns in a secure environment.
  • Residential property in Gurgaon are in high demand because of their spaciousness, peace, and greenery and modern amenities and services ranging from schools, expansive malls, and state-of-the-art hospitals.

So, these are the most affluent residential areas in Gurgaon:

The Golf Course Extension Road

The Golf Course Extension Road, also known as the Southern Periphery Road, is one of the most vibrant and niche property markets in the area. It presently houses some of Gurgaon’s most well-known residential complexes and societies.

Sohna Road

Because it is near two major roads, NH 8 and the Gurgaon-Manesar-Palwal Expressway, Sohna Road in Gurgaon is also considered one of the luxury residential zones in Gurgaon (KMP).

DLF Gurgaon

DLF has separated its Gurgaon neighbourhoods into stages and blocks. DLF Gurgaon is divided into five phases. Similarly, there are blocks in various phases alphabetized from A to Z. DLF also has many residential apartment societies, offices, shopping malls, and event venues in Gurgaon.

Palam Vihar

Palam Vihar is one of Gurgaon’s most prestigious residential zones, not only because of its residents but also because of its location. Kapashera, NH 8, and other business areas like Udyog Vihar are all close.

Conscient Hines Elevate Gurgaon

Elevate is one of the most well-known residential developments in Gurgaon by the Conscient Group. The house is on 7.5 acres of land in Gurgaon’s Sec 59, Golf Course Extension Road. It is a 30-story building. Each of the Elevate Conscient Towers has residential apartments ranging from 2095 square feet to 3395 square feet. Conscient Hines Elevate aims to give 3BHK-4BHK homes with world-class amenities to buyers. Residents will have access to all modern conveniences while taking in breathtaking views of the Aravallis in the south and serene vegetation in the north.

Trump Towers Gurgaon

Tribeca Creators LLP’s Trump Tower in Gurgaon is a residential building. This posh high-rise in Sector 65, Gurgaon, features large 3 BHK and 4 BHK super luxury apartments. The striking glass façade of Tribeca Trump Tower will entice you in.

The Trump Towers Delhi NCR is a world-famous address set on acres of golf course and greenery in the heart of a sophisticated neighbourhood. The expansive, double-height living room at Trump Towers Gurgaon offers sweeping views over the whole arc of the city’s skyline.

Future Scenerio

Gurgaon’s luxury real estate market is likely to pick up steam in the future due to:

– Improved demand will be driven by the quality of construction, amenities, specifications, and closeness to social infrastructure.

– Gurgaon is one of the country’s foremost corporate hubs, with roughly 500 multinational corporations and an even more significant number of Indian conglomerates. This is also one of the reasons why Gurgaon attracts a large ex-pat population since it provides them with a world-class lifestyle.

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