Why is commercial real estate investment a better option for millennials?
The younger generation of property buyers in India typically pays little attention to the prospect of investing in commercial real estate. People have a tendency to assume that this is a high-risk alternative for investing their money, especially when compared to investing in residential real estate. However, commercial property is seen as an investment choice that offers a number of tax benefits under Section 80-IA of the Income Tax Act. These benefits are exclusively available with commercial property and cannot be obtained with any other type of property. Investing in commercial real estate at a young age is recommended for several reasons, which will be discussed in this article.
The millennial generation places a high priority on minimizing their financial burdens. In recent years, there has been a significant rise in the cost of living, making it impossible for younger people to realize their dream of buying a house in the city itself. They want options, they want choices, and they want everything immediately. Rather than placing all of their eggs in one basket, young people who have dreams of starting their own business can consider making investments in commercial real estate instead. This is the more prudent course of action.
When compared to the expense of acquiring a residential property, the cost of acquiring a commercial property is significantly lower. If the investor is successful in finding tenants for the commercial property, then they will have a steady stream of money coming in from the investment. The rate of return on investment (ROI) for commercial property is, in most cases, significantly larger than that of residential property. Therefore, in the long run, an investment in commercial real estate will provide better returns than an investment in residential real estate.
One more aspect that works in favor of investing in commercial real estate is the absence of involvement from end-users in these transactions. In the case of residential properties, there is always the possibility that the tenant may be late with the rent payment or may even cause damage to the property. In addition, there is no way to completely eliminate this risk. However, in the case of a business lease, a security deposit and other similar precautions can be implemented to reduce the likelihood of adverse outcomes. It is also simpler to resell a business property than a residential one because there are no end-users engaged in the transaction.
As a result, we can see that there are a number of factors that make investing in commercial real estate a better option for millennials to consider. Young people who want to establish their own business or create passive income through rental income will find that investing in commercial real estate presents a perfect investment option because of the high ROI potential it offers and the low cost of acquisition it requires.
