Want to earn huge rental income? It is better to invest here!

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For people who have a desire to increase their wealth, real estate is a good investment option. Properties are of two types: residential and commercial. Residential properties include houses, flats, and villas. Examples of commercial properties include shops in shopping complexes, malls, office space, warehouse, data centre, etc.

Residential properties are primarily bought for personal use, but these can also be rented out for income. The price of residential property increases over time, making it a popular investment choice.

Commercial property is used for business purposes. It yields higher rental income and remains consistently in demand. Commercial property is a good option if you want to get regular income. Plus, it offers higher rental yields compared to residential properties.

Rental yield refers to the return earned from renting out a property. In major cities like Delhi and Mumbai, the rental yield for residential property is typically around 2 to 3 percent, but in some areas, it can go up to 3.5 percent. In contrast, commercial property rental yields are usually around 5 to 6 percent. In high-end retail spaces like malls or shopping complexes, it can even go up to 7 to 8 percent. The higher the rental yield, the more income you can earn from rent.

The income from rent and the appreciation of property value, known as capital appreciation, depend on several factors. Some of these factors are location, demand and supply or (market conditions), infrastructure, and amenities provided. These factors are crucial for both commercial and residential properties.

Commercial properties typically have long-term lease period. This means such properties are rented out for an extended period. Tenants in commercial properties prefer stability, which leads to regular rental income and often rent goes on increasing over the entire period of the lease. In contrast, residential properties may require refurbishment costs when tenants vacate the premises. People sometimes overlook this factor.

Commercial properties, such as shops or office spaces, tend to be more expensive compared to residential properties. However, in some cases, the overall investment cost may be lower. For instance, you can easily rent out a 300 square foot office space, but it can be challenging to find tenants for flats of the same size, and rental income might be lower as well.

First-time property buyers often prefer residential properties like houses. because they get a sense of security when they put money in a residential estate. On the other hand, experienced real estate investors focus on better returns. This makes commercial properties a preferred choice for them.

Choosing between commercial and residential properties is challenging because both have their own pros and cons. If budget constraints are not an issue,,then commercial properties may be a good option in the longer run. However, if the budget is limited, residential properties are a viable choice. Before making any decision, you must consider factors like budget, connectivity, rent, maintenance, operating costs, tenant availability, and market conditions.