When most people think of real estate, they often have the notion of residential places. But when we talk about commercial properties, the picture becomes much bigger. Commercial real estate (CRE) properties are used exclusively for business-related purposes or to provide workspace. Commercial real estate is usually leased to tenants to conduct income-generating activities. There are several commercial properties for sale in Kolkata; If you are going to buy one, you come to the right place.
To assist you in making the best purchase, we will cover various aspects of commercial properties for sale in this buyer’s guide.
Things You Must Consider While Buying Commercial Properties
Buying commercial real estate in Kolkata comes with several risk factors, but you can easily avoid them by considering some critical factors. Otherwise, you could end up with big unplanned expenses down the road. Before buying a property, you should evaluate the location, objectives, presence of legal documents, scope of growth, etc. Let’s have a closer look at them.
Which type of property is it?
Before buying any commercial property, you should know which type of property it is. There are three major classes of commercial properties, Class A, B, and C. Class A properties are quips with all high-quality facilities; hence the price of these properties is the highest. On the other hand, class B and C properties are old properties that need further renovations and improvements to become usable. These properties mostly come at a lower price, and if you are looking for a budget-friendly option, these are perfect for you.
Is the location appropriate for business growth?
Location is a crucial factor you should consider when choosing a commercial real estate property. A good location will make it easier for clients, staff, and suppliers to reach you. Additionally, do market research in your area to evaluate local competitors and demand. This way, you can determine if the location is appropriate for business growth.
Does it possess all the amenities you require?
While looking for commercial properties for sale in Kolkata, you should evaluate if the space possesses all the amenities you require for your business. Evaluate the condition of the building, including the structural integrity, electrical systems, HVAC, plumbing, and any specialized equipment required for specific industries. Engage professional inspectors to assess the property’s condition and identify potential maintenance or renovation costs.
What is the proximity of the place to major transport networks?
Before selecting any commercial real estate property, consider the proximity of the place to major transport networks. Select a location close to important roads, railroads, and ports at all times. This ensures the smooth movement of raw materials and completed items. As a result, transportation expenses are decreased, and the effectiveness of the supply chain is increased.
Does it have all the permission and legal papers to be used commercially?
Whether you are purchasing a plot of land or a pre-built structure, it is crucial that you carefully observe all legal requirements and keep in touch with the commercial real estate Agent regarding the transfer of documents transferring the title of the property. Ensure it has all the permission and legal papers to use commercially.
Pros and Cons of Buying Commercial Properties
Purchasing a commercial real estate property has several pros and cons; let’s have a closer look at them.
Pros of Investing in a Commercial Property
Higher rental income
The biggest advantage of investing in commercial real estate in Kolkata is its potential to get the highest rental income. If the location and the condition of the property are good, then it can yield profitable rentals up to 13% to 15%, which is relatively higher than the profits earned through residential units.
Ease in dealing with tenants
Another important pro of investing in commercial real estate is the ease of dealing with tenants. For commercial properties, most tenants are usually corporate, banks, or retail chains. Dealing with such companies is relatively easy, and there is no running around to get the rent.
No furnishing expense
Another benefit of buying a commercial property is no furnishing costs. This is because the tenant will pay for the furniture once you rent the space. So you, as an investor, can provide raw property to your tenant. This benefit stems from the requirement that any business renting the facility abides by its operating principles.
Relief from tax payments
Investing in a commercial real estate property can relieve you from the complexity of tax payments. This is because, in most cases, tax payments are levied on the firms that have rented a space in the commercial building.
Cons of Investing in a Commercial Property
Heavy initial investment
One of the biggest cons of investing in a commercial property is it requires a heavy initial investment. There are several commercial properties for sale in Kolkata that involve a far larger sum of money compared to residential properties. If you want to buy a commercial property, you must be ready for that.
Costlier loans
Loans for Commercial properties are usually costlier and come with comes with a greater rate of interest than residential properties. Apart from that, the process of availing the loan is also more complex, and the lender, which may be a bank or NBFC, takes longer to sanction the loan.
High maintenance cost
The costs associated with the maintenance and upkeep of commercial property are usually high, which adds to their disadvantages. In the case of a residential home, maintenance costs are minimal and limited to minor fixes (such as tap repairs and minor electrical work). In a business setting, maintenance and renovation projects are often huge.
Difficulties in finding a tenant
Finding the ideal tenant for commercial real estate in Kolkata, such as a shop or showroom, can be more challenging than finding a tenant for a residential property. Due to the difficulty of finding tenants, properties may remain vacant after one tenant vacates and another is gone for an extended period.
Wrapping it up
Buying a commercial property in Kolkata can be beneficial for your business growth. Here we discuss different aspects of commercial properties for sale. We hope this buyer’s guide will help to choose the right commercial real estate for you. If you are still struggling, consider Ganesh Complex, one of the leading commercial real estate space providers in Kolkata.