Have you considered the potential of real estate investment? Many savvy investors are drawn to it for its promise of steady income. If you’re financially stable and own a house, you might want to take the plunge into buying a rental property, thereby securing a favorable return on your investment (ROI). One term you should be familiar with in this context is “pre-leased property.” Let’s break it down simply.
What is a Pre-Leased Property?
A pre-leased property is a space that has already been rented out to a tenant for a specified duration. This arrangement provides you with guaranteed income right from the start, making it a secure investment option. Pre-rental properties can encompass various types of spaces, including banks, ATMs, commercial offices, and retail shops.
Here’s a snapshot of the expected returns from different pre-leased property types:
- Banks/ATMs: Typically yield a return on investment (ROI) of 4.5% to 6% per year.
- Retail Shops: Generally offer similar returns, around 4.5% to 6% per year.
- Commercial Offices: Tend to provide a more attractive ROI, ranging from 5% to 8% per year.
While residential properties can also be lucrative, they often fall short in comparison to commercial pre-leased properties regarding potential returns. One significant advantage of investing in pre-leased properties is that you can start earning rental income immediately, with no waiting periods involved. Additionally, these properties often appreciate in value over time.
Key Factors to Consider When Investing
If you’re contemplating a purchase of a pre-leased property, keep these crucial factors in mind:
- Location: Opt for a prime location that is likely to attract reliable tenants.
- Building Quality and Age: Seek out well-maintained properties that aren’t too old.
- Brand Value of the Tenant: Properties leased to reputable companies or well-known brands often provide more security.
- Lease Terms: Review the lease duration and conditions for rental increases, typically ranging from 9 to 25 years with potential hikes of 10% to 25%.
For those eyeing investment opportunities in Noida, a pre-rental property could be an intelligent choice. Contact us today for a curated list of the best pre-leased properties in Noida and their monthly rental figures!