To most of us, investing in a Residential Property seems to be a more lucrative option as compared to investing in Commercial property for sale or commercial property on lease. However, in reality the scenario is totally different. To know more, let us go through some of the pros and cons of investing in residential property.
Residential Property Investment: Pros It is tax deductible: Most expenses related to Residential property are tax deductible. For instance, the depreciation on the property, property loan are all deductible when you pay your annual tax. This is one of the main reasons why investors often make a beeline for investing in Residential properties instead of commercial property. Money minters: Another advantage of investing in residential property is that you get to make a huge amount of money as and when the value of the property increases. This is particularly true in the case when you invest in a property that is situated in a prime location in various cities. Earn from rentals: An investment made in residential property is an investment for a lifetime. This is because after buying a residential property, you can put it for rent or lease it to a company and earn extra income from the rentals. The cons of investing in Residential property : Why invest in commercial property in Mumbai (and elsewhere ) Rise in interest rates: Many a times, the interest rates of residential property may rise overnight, leaving investors in a lurch. This is not the case with commercial properties and hence, it is a safer bet particularly if you are taking a loan for investment. Bad tenants: Okay, so you give your property for rent and earn extra income. But what if you get really bad tenants/occupants? They may not pay the rent on time, cause damage to your property or even carry out activities that might not go down too well with those living as their neighbors and for that matter you. Commercial property on lease by various companies, won’t encounter such problems. Developing it can take up your time: Many a times, investing in residential property can take up much of your personal time since sooner or later, you might end up using it. This is the reason, you’d want everything to be perfect. Commercial property on the other hand, needs less attention from you as an individual and hence it is a safe bet.
So, these are some of the pros and cons of investing in a residential property. I am sure that after going through them, you might want to reconsider and invest in commercial property in Mumbai. You can either go for commercial property on lease or commercial property for sale – whichever falls within your budget constraints.