Investment in Pre Rented Property in Gurgaon will give you the Following Benefits:
- Longer Lease: Commercial properties have a typical lease term of 9 years, which helps you plan your finances in a better way and enjoy uninterrupted yield for a longer tenure without having to search for fresh tenants after smaller intervals.
- Better Returns: Commercial property would offer a yield between 5.5% in case of a Bank and 7 to 8% in case of a good quality tenant with a fresh lease.
- Stability: The stability of rent and the lease is far superior in case Of a commercial property, considering the fact that you are not dealing With individuals rather, you would be dealing with an organization, which is in business.
- Longer Lock-ln Periods: Commercial rented properties typically have a lock-in period of 3 years, which means that the tenant cannot vacate the property before 3 years. Even after 3 years tenant has to consider the following factors before vacating the property:
High Capex on Interiors: Typically any tenant organization would spend a large amount of capital to furnish their office, these costs would run in the tune of about Rs. 2,000 to Rs. 3,000 per sq.ft.
Cost Of Moving: There is fairly large cost of moving in terms Of both actual costs and loss Of time and resources, which deters the organizations to move too Often.
Brokerage & Legal Costs: Every time the organizations move, there are brokerage costs and legal costs which add on to the cost of moving
- Safest Option: Investing in Rented properties is one of the safest options as you get a steady income flow month after month, while your property is poised to at least get you a capital appreciation of about 15% every three years. (Rented Property valuations are directly related to the rent, so when the rent goes up by 15% after 3 years, so does your property value).As already mentioned, you would also get a rental return of about 7 to 8% apart from this appreciation.
- Deduction on Income: Rental Income falls under “Income from house property”. There is 30% standard deduction on commercial rental property which you will be entitled to. This deduction is given irrespective of whether you spend this in repair and maintenance of rented property. Hence if you earn 300000 from rental, you will get 30% standard deduction which is Rs 90,000. Your taxable income will be 210,000 only. This income will be added to your regular income and taxed as per the tax bracket you fall into.
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