Buying Tips For Pre-Leased Commercial Property
A pre-leased or pre-rented property is one that has been leased to someone and then sold to someone else together with the tenant. Including the sale, there is a concurrent exchange of property ownership, which means that the lease agreement is also passed to the new owner. A pre-leased property has several advantages, including better investment returns, consistent revenue, and no waiting time. Pre-leased commercial property investments have recently increased, giving it the most appealing possibilities for property investors, businessmen, business offices, and ultra-high-net-worth people.
Here are a few pointers to keep in mind while purchasing a pre-leased business property in India.
Location
Everything is defined by location. This comprises a property’s rents, capital appreciation, and long term viability. A strong strategic location results in a reduced vacancy rate, more capital gain, and long-term rentals.
Structure and construction
New and contemporary business parks fetch higher rents and longer lease terms. This is because they are considerably sturdier, more deeply planted, better constructed, and more energy-efficient. Glass facades, excellent energy conservation rankings, well-designed entrances, additional elevators, and enough parking spots are all signs of Grade-A office space.
Tenant
The most crucial component in determining the true rental revenue from a property is the tenant; everything else nearly comes second. Experienced investors choose blue-chip international corporations. Multinational firms not only pay their rent on time but, also boost the property’s capitalized worth.
Actual and fictitious rents
The most recent transaction in an area or building is used to calculate real estate rents. A knowledgeable investor will always have such statistics prepared while conducting research. A variation of Rs 5-7 per sq ft is generally okay, but anything more than Rs 10 per sq ft is a fabricated rental. A lower-than-average rental rate suggests a low cost of acquisition.
Quality of architecture and fit-outs
The majority of the offers available in North India are completely equipped. The design and architecture of the designated carpet area, as well as the sort of fit-outs, such as high-quality seats, workstations, a well-designed overhead, and high-quality carpeting, are all part of the capital expenditure expense incurred by the investor at the time of purchase. Even once the current tenant has departed, high-quality fit-outs make much more sense.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
