5 reasons why you should invest in commercial propertiesJune 26, 2020
It’s the year 2020 and flying cars are still not a reality. What we get instead are soaring property prices and rising living costs. As many are lamenting about not having enough to go around, the truth is that this is a time for opportunists. As the rate of unsold properties is almost reaching an all-time high, potential buyer are also given the chance to grab the best offers around.
As plenty of property developer companies are stuck with unsold properties on-hand, many are coming with better schemes and deals to attract buyers. Commercial properties have always been a golden goose in the eyes of investors. Let us share with you today some reasons why you should invest in commercial properties.
#1. Better ROI
Investing in the right location is definitely an important aspect. However, the ROI you get also depends on your own creativity in managing the property. If you own a multi-storey shop lot or office lot, dividing up the space and partitions opens up your premises for a wider pool of tenants. Each floor or partition can be rented to a different tenant. Renting out your space to several tenants can also make sure that you get more rental yields compared to having a single main tenant.
#2. Increased cash flow
In this time where any form of additional income is welcome, smart property investments can generate extra income for you. Coincidentally, renting out commercial properties yield better rental rates compared to residential properties. In return, you can also use the rental income to pay for the mortgage and other associated maintenance costs.
#3. Value appreciation
This may vary depending on the location, but the general consensus is that commercial properties have better appreciation compared to residential. However, the rate ultimately depends on several factors such as population catchment, location, connectivity and urbanization. You should do your research on the area and its future development plans. Check if there are any new highways or major roads that are being built and any other major developments. These will all affect how much your property appreciates in value.
#4. Minimal maintenance and management
When it comes to maintenance and management, commercial properties require much less effort from the landlord. In fact, it is very common for landlords to rent out an unfurnished lot to tenants. Commercial tenants will be responsible for designing and renovating the interior and exterior to suit their needs. They are also more likely to take good care of the premises since they would want customers to visit.
#5. High tenant-retention rate
Other than that, tenant retention rates are also higher because businesses are less likely to relocate. Business owners will have also invested capital in renovating the premises and moving out basically throws that out of the window. Other than the additional cost needed for relocation, businesses that rely on walk-in customers such as restaurants, cafes and retail outlets want to avoid losing their established customer base.
Investing in commercial real estate is definitely something to consider if you do proper research. The last thing you want is to dive in without any knowledge. As a property developer company in Malaysia, UDA Property has developed and managed successful commercial real estate throughout the country.
Click here to check out our latest commercial real estate listings from UDA Property.