Things To Consider Prior To Making Investments In Preleased Property

What is pre-leased property?

Pre-leased property means asset that is given on rent already to a bank, restaurant, MNC, BPO, hotel, etc. Investing in such properties does offer the benefit of enjoying quick returns.

Investment types

As soon as the investor buys the property and desires to give it out on rent, then he needs to wait until, full completion of construction of the building. Generally, the investor purchases the property during the time when construction work has not yet started. Usually construction takes about 2-3 years for completion. To get quicker returns from this investment, it will be useful to sell it during the time of construction. Choosing pre leased property to banks in Delhi will be a wise decision made.

There exists two pre-leased deal type, with one being lease-hold that is available with the government institutions. This area is provided for long term lease, for about 99 years and can be extended further. But in reality, the person simply invests and starts to earn better returns without actually being the property owner. He will be provided with the rights, but with specific limitations to follow when taking any type of decision, pertaining to the property.

The other one is the free hold type. After purchasing the property, the investor becomes the owner of the property and is given full rights to it including accountability. Majority of the pre-leased commercial are considered to be of free-hold basis. It effectively means that investing in this option can be termed to be a wise choice made. It also provides the person a fixed income without actually wasting even a single moment, right from when it is purchased. The aim here is to lease the property to any reputed organization and to earn good profits from it for around 2-5 years and then exit with sufficient profit through selling of the same, if deemed necessary.

How to determine where to make investments?

The decision entirely depends upon individual preference and price of the property. This is regarded to be among the biggest factor to determine profits. Lower price is sure to culminate into higher profits. The other aspect to consider is the occupant’s reputation. In case, the occupant turns out to be a bank or an MNC, then approx. profit is likely to be around 6-8 percent! Such occupants tend to sign up contracts for longer lease period. Government banks are stated to be among the safest players when it comes to giving out pre leased commercial property in Delhi.

Again for MNCs, IT units, domestic call centers, foreign banks, etc. the opportunity to earn more income is high, since the turnover of such company’s range from 8-12 percent. The lessee having invested a fortune on interiors can be expected to stay longer and thus, provide more profits.

The schemes does appear promising, however, it will be necessary to ensure that the different aspects are carefully checked pertaining to the property to be purchased. Only then can the investor get peace of mind and satisfaction.