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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?

Affordable Projects In Gurgaon


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.

Property in Gurgaon

Sobha City Sector 108 Gurgaon

Sobha City Gurgaon is a luxury community designed to make sure you have everything you desire in a living space enhanced by modern technology. This residential development spans over 39 acres and includes 8.5 acres of pure green and open space. It’s on a 75-meter-wide functioning road with a half-kilometer frontage. It is strategically positioned along the Dwarka Expressway in Sobha City Sector 108, Gurgaon’s fastest-growing area.

Here are some of the significant highlights of Sobha city

  • 16 sports & social activities available
  • Two clubhouses are totalling 40,000 square feet
  • The resort-style lakelet spreads across a half-acre
  • Twenty-two towers are in total
  • Apartment options include two and three BHK
  • There are four apartments on each floor
  • 160mm wall thickness for more carpet area
  • The apartment entrances are not facing each other
  • Apartments do not have a common wall, ensuring privacy
  • Utilization of space maximally for each activity
  • The ideal size of a living space
  • The community is gated and secure
  • Delhi’s reserved greens can be seen from here
  • In the vicinity are upcoming social and commercial infrastructure projects.

What are some of the amenities at Sobha City Gurgaon?

The project is adorned with modern amenities that consider your interests in leisure, happiness, health, and recreation. There is a sense of man-made & natural beauty and luxury throughout.

This residential property comes with a kids pool and multiple dedicated play areas, 60m long Olympic size swimming pool, 25m long all-weather indoor swimming pool, three flood-lit Tennis courts, two indoor badminton courts, full-size basketball court, volleyball court, squash court, three TT tables, skating rink, billiard room.

Sobha City offers the advantages in regards to its location;

The Najafgarh Kapashera Road connects Sobha City to the rest of Gurgaon; the Dwarka Expressway is only 3 km away, and the Gurgaon Railway Station is only 5 km away and takes about 15 minutes to reach. IGI Airport is 20 kilometers away and takes 30-40 minutes to reach.

Also Read: Indulge in Luxury at Sobha Karma Lakelands