By Soniya Gaonkar on Mar 11, 2022 7:02:22 PM
Are you about to invest in a commercial property in Pune? At the outset, we’d like to congratulate you on your decision and appreciate your endeavor to be part of Pune’s growing commercial real estate. While buying a commercial space in Pune, you need to ask the right questions and make an informed and sustainably beneficial decision. Let’s see what those are.
5 Questions to Ask Before Investing in a Commercial Property in Pune
From location to sustained demand, probing is pretty much the key to making a beneficial investment in the long run. Let’s take an elaborate look at each question.
1. What Is the Appreciation and Business Potential of the Location?
Here, you may have two perspectives – one, from a pure investment viewpoint (wherein you buy the property and lease or rent it), and the other one, from the business perspective, wherein you will operate your business (especially retail) through the property. For the former, the property’s appreciation pace and rate will matter to you.
However, for the latter, you will find yourself more concerned about the location’s potential for business generation, the type of consumers around, how favorable they are for your business, etc.
Additionally, ask about the location’s current accessibility, future infrastructural development, connecting roads, etc. Needless to say, visit the property as many times as you feel necessary to make an educated decision.
2. Can I Get a Pro Forma of the Property? Or, What Is the Net Operating Income of the Property?
Yes, this is another crucial aspect. A pro forma is a vital document that includes various expenses such as utilities, common area maintenance, etc. In other words, it talks about the net operating income of the commercial property, which you must factor in, as that is a direct hit to your revenue. It will also help you calculate the RoI of the property and thus decide on your investment accordingly.
3. Does the Property Enjoy Sustainable Demand?
While commercial properties on some locations experience demand due to a temporary boom, many remain in demand sustainably. They are at locations that would remain perpetually in demand. So, check if your property is at such a location.
Are you buying it only because you felt the location or the area has solid growth potential in the next couple of years? Or, are you looking at a steady yet sustained appreciation, which would keep creating wealth for years? Additionally, also enquire about the saturation status of the location.
4. Why Is the Previous Owner Selling the Property?
This question holds relevance if you are about to buy a resale commercial property in Pune. Of course, you wouldn’t want someone to trick you and sell a property, the potential for which has already been saturated. Besides, check with the previous owner how the property fared while he owned it and rented or leased it to someone or himself used it for a particular business. Think rationally about the claims the owner may make.
Look at different options for that purpose. You are out for business and to make a sustainable investment. Ensure you do full justice to your investment by choosing a property conducive to wealth growth.
5. What Is the Estimated Appreciation Rate?
Ok, this one also is a significant question. But don’t blindly believe the promises the developer or broker may make, we mean, rough ones or those made apparently.
Ask for a comprehensive report that puts forth the historical, present, and therefore future appreciation of the property. Check the reliability of the source of information to verify the authenticity of the report. If something seems unusual, meaning an unnatural promise about the property’s appreciation, explore the reasons why the report projects an unusual surge in the property’s appreciation rate. Compare the appreciation rate of nearby properties and check if the difference between the reports is unusually large.
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Bonus Question – Is There a Property Guarantee?
Some properties offer a guaranteed income period. If your prospective choice comes with one, verify if the guarantee genuinely makes sense. Compare the guarantees that other local properties offer, specifically when it comes to rental income. Examine the corresponding demand of the location and if the guarantee claim is proportionate to the demand, or is it only a hypothetical claim to attract investors.
Buy a Commercial Property Near Pune at Kohinoor World Towers
Situated at an exceptionally beneficial strategic location between Pimpri and Chinchwad near Pune, Kohinoor World Towers (KWT) would form an incredible choice to buy commercial office space in Pune. The project features multi-sized A+ Grade commercial spaces, five towers of 12 floors each, and a High Street to make it a promising future retail hub. To know more about KWT, call +91-020-6764 1818.