Investing in Pre-Leased Properties in Real Estate India: A Lucrative Option
Posted On October 10, 2023
Are you considering becoming a real estate investor in India? You can definitely invest in a residential property for sale in India. However, commercial properties are worth a look, too. An increasingly popular concept that has gained popularity recently in Real Estate India is the availability of pre-leased properties, especially in the commercial sector.
Pre-leased properties already have tenants, offering their investors assured returns or fixed income from day one. Let us discuss the benefits of investing in pre-leased commercial properties for sale in Gurugram and other metros in India.
Table of Contents
What are Pre-Leased Properties?
Pre-leased properties are already leased out to tenants at the time of sale. When an investor buys a pre-leased property, they continue with the existing lease agreement and earn fixed returns from the rental income. This provides additional security and stability for the investors, who don’t have to worry about finding tenants.
Investing in Pre-Leased Properties
Investing in pre-leased properties in India offers several benefits to investors and can be a lucrative addition to their portfolio. Let’s explore some of these advantages:
Assured Monthly Income
One of the major benefits of investing in pre-leased properties is the assurance of a regular and fixed monthly income. Since the property already has tenants, the investor starts earning rental income right from the beginning. This can be particularly attractive for individuals looking for a steady source of income.
Pre-leased properties often come with the potential for capital appreciation. Commercial properties in prime locations with excellent amenities and infrastructure have a higher chance of appreciating their value over time. Investors with a longer investment horizon can benefit from the appreciation in capital values, making it a lucrative investment option.
Zero Waiting Period
Unlike investing in under-construction or vacant properties, where investors have to wait for tenants to occupy the property to start generating rental income, pre-leased properties eliminate the waiting period. As the property already has tenants, investors can immediately begin earning rentals after successfully transferring the lease deed.
Investing in pre-leased properties allows investors to diversify their investment portfolios. By investing in properties in different locations and sectors, such as commercial properties for sale in Gurugram or residential property for sale in Pune, investors can spread their risk and protect themselves from potential market fluctuations. This diversification can provide a more stable and balanced investment portfolio.
Investing in pre-leased properties carries a lower risk compared to vacant properties. The chances of tenants vacating the property before the lease expiry are relatively low, giving investors a sense of security.
Many investors prefer these assets due to their fixed rental income. As a result, pre-leased properties often have higher liquidity than vacant properties, making it easier for investors to exit their investments when needed.
Rental Hike Potential
Investing in pre-leased properties ensures investors do not worry about rental growth. Lease agreements for pre-leased properties often include provisions for periodic rental increases. This means that investors can benefit from rental hikes during the tenure of the lease, further enhancing their returns.
Before Investing in Pre-Leased Properties
While investing in pre-leased properties can be an attractive option, there are a few key considerations that investors should keep in mind:
Price Difference: Buyers should review the price difference between vacant commercial and pre-leased properties before deciding. Assessing whether the rental income justifies the premium paid for a pre-leased property is essential.
Quality of Tenants: Investors must assess the quality of tenants occupying the property. This involves checking their credit history and financial position to ensure they can pay the rentals on time. A reliable and financially stable tenant is crucial for a successful investment in pre-leased properties.
Lease Duration: Checking the lease duration is important, as finding new tenants can be time-consuming. Investing in properties with tenants with longer lease terms is advisable to minimize the vacancy risk and maximize rental income.
Investing in pre-leased properties in real estate India can be a lucrative option for investors. Pre-leased properties offer several advantages: assured monthly income, potential capital appreciation, and lower risk.
However, investors should carefully consider factors such as price difference, quality of tenants, and lease duration before making an investment decision. As always, seeking professional advice can help investors capitalize on the benefits of pre-leased properties and make informed investment choices.