There are several reasons to invest in the real estate sector. People are usually confused about investing in stocks or real estate. Real estate investment provides you with a tangible asset and assures a good Return on Investment and financial stability in the longer run.
Difference between a Plot, Commercial and House Project?
Plot
A plot is a piece of land that can be owned by one or more than one person or other legal trusts or companies. The plots are an empty place except for the footpath and other enhancements. They have set boundaries that are documented but not necessary to have them physically.
Residential Property
Residential properties contain apartments, single-family homes, and townhouses. The property owner can dwell in the property or can rent out and enjoy rental income. Individuals and Families typically lease residential properties. As an outcome, there is typically an emotional element involved in residential real estate as it involves renting families or individuals their primary place of residence.
Commercial Property
Commercial property is used for non-residential activities like public facilities, hotels, office space, retail shops, industrial buildings, etc. Similar to residential property, and the landlord can run a business from the commercial property they own or even lease some or all of the space to potential tenants. Many corporations prefer to rent rather than own the property they operate their business from since real estate is not their core business; they can free up capital to invest in their core business.
Best Investment Opportunity:
Deciding between a residential vs. commercial or a plot investment property is no easy feat to tackle, mainly because all have their own set of advantages and disadvantages. All will expand your portfolio; they come with significant tax benefits and will bring you one step closer to accomplishing your financial freedom goals.
Benefits Investing in a House
1. The average person might not save enough for a sizable down payment on a commercial property, while it is much more likely that they have plenty saved for a single-family home. If the thought of a commercial property sounds too strong as a new investor, think of it this way: Once an investor has purchased some cash flow producing residential properties, they will probably have the capital and significant experience to invest in a commercial building.
2. Every real estate property comes with a particular set of opportunities. The main objective of a residential property is renting or accommodation. When time is right, you can also sell out your property to get good returns.
3. Due to an expansion in population, the need for houses is growing at a fast pace. As an outcome, the pool of people looking for residential property is quite large. That means it is easier for you to rent/sell out your house. In brief, the demand for residential properties is more than that of shops and office spaces.
Benefits of Investing in a Plot
1. Whether you intend to live in your purchased house or not, you will still need to pay a definite maintenance amount. Some of these charges are constant, for instance, the maintenance bills issued by housing societies. However, they can be unplanned, as it is in the case of renovations, plumbing issues, electrical problems, etc.
2. One of the biggest advantages of investing in land is that it is a finite resource. New residential high-rises will continue to be developed, but there is only an inadequate amount of land available for ownership. Because of this, owners can be assured that their investment will constantly be in demand as a result of which, its value will continue to appreciate.
3. A plot will not decay ever. A building not constructed properly might decay and deteriorate in value, but the plot’s value will only appreciate.
Benefits of Investing in a Commercial Property
1. One of the best reasons to invest in commercial property, over residential rentals is related to its earning potential. Regardless of location, every commercial property usually has an annual return off much higher than plot or residential.
2. A commercial real estate property landlord can improve the property, increase rents, restyle the interior or exterior, or even apply for a zoning change. He can rent or sell the property on whichever price he likes.
3. In a multiple-occupancy building, there is a lower risk of income loss for vacancies, since other tenants continue to cover the operating costs. Multiple people contribute to the cost of the building, so there is quite less risk of affording the cost alone.