Are pre-leased properties safe for investment in the present scenario? Pre-leased properties offer a fixed return on investment (ROI) in comparison to other investment options such as bonds and fixed deposits. However, the rate of return or capital appreciation generally depends upon the location of the project and development taking place in the vicinity. Due to all these factors, the returns on an average pre-leased property may range between 9 to 12%. Furthermore, the buyer of a pre-leased property is assured of a fixed return from the beginning of the purchase. With this, the investor of the property would be able to earn a pre-settled rental income apart from the capital appreciation on the property that is purchased.
Bhutani Technopark by Bhutani Group is one good example of a trending commercial space that offers pre-leased investment options in Noida. Investing in pre-leased properties, especially in the areas such as Sector 127, 168, 90 in Noida, would be an attractive proposition for serial investors. There are many reasons to invest in commercial real estate while considering pre-leased properties. Therefore, here are some important factors that highlight why the pre-leased property is considered to be a safe investment in the current real estate market.
Capital Escalation
Keeping aside the assured rental income, the pre-leased property promises an appreciating value in a long-term period. When it comes to investing in pre-leased properties, the location of the project plays an important role. Thus, if the project is situated in a busy or potentially busy place, then it is more likely to offer a great return on investment.
Increase in Rental Value
As per the existing rental agreement, the owner can estimate the increase in rental revenue generated from a commercial pre-leased property. Furthermore, if the tenants decide to vacate the property after a certain period, the new tenant will have to start from the current market price. As a result, the investor is assured of unaffected generated revenue.
Immediate Return on Investment
The investors are not only provided with the property, but they also get existing tenants. Due to this, it eases down the whole process of finding new tenants to start generating revenue. Thus, pre-leased properties have become an ideal option to begin earning from the day the property is owned.
Easy Loans
As pre-leased properties assure a good return on investment, a potential customer would be able to avail almost 90% – 100% of the entire price as a loan. This works as a tool that enables the buyers to invest in pre-leased property to get the highest returns.
Lower Risk
Generally, a commercial pre-leased property guarantees around 6-12% of returns, whereas a pre-leased residential property offers up to 3% returns. Most of the sectors in Noida provide a diverse portfolio for the owners of the same property which could be used for commercial purposes. Furthermore, the stability of pre-leased property has been a major factor in terms of low-risk investment. The steady revenue from the property is what makes pre-leased investment safer.
Conclusion
For people that are constantly seeking a safer and tangible investment, the pre-leased property would be able to offer them around 16-20% per annum at the time of exit. The pre-leased property also creates a great opportunity for small investors that have limited funds. With this, the demand for additional pre-leased properties from different sectors in Noida is also expected to increase in the near future. Judging by the current scenario of the real estate market in Noida, the pre-leased property would be a wise investment decision to get an assured return on investment.
