The returns on commercial real estate property even through fractional investment are huge. Modi Builders, one of the leading real estate companies, have reviewed that 3,00,000 units of commercial real estate properties are sold only in top six cities of Bengaluru, Mumbai, NCR, Chennai, Pune and Hyderabad every year. Taking a cue from this scenario, realty experts at Modi Builders have developed several commercial properties, including sterling Villas in Hyderabad, loaded with several modern amenities.
But how is commercial real estate investment better than other investment options? Let’s analyze the returns from various sectors.
- Returns from cash, equity and fixed deposits:
Even though there is a lot of risk associated with equity investments, it is still the winner. The investors are compensated by almost double the returns of fixed deposits. This is significant, given that inflation averaged above 5-6% during this period rendering real returns from fixed deposits close to zero.
- Fixed deposits:
According to Modi Builders review, stock markets have the highest risk and return percentage, whereas fixed deposits have the lowest risk and deposits. In stock market, one can lose half of the capital in a single day, while as in case of FD, the principal is always safe.
- Returns from debt funds:
An investor can look at debt mutual funds to get good returns from FDs. The returns can vary between 9-11 per cent depending upon the mix of securities. However getting 18-20 per cent returns are very tough here. This is the reason investor with good market knowledge are likely to invest mainly in long lasting commercial projects, like apartments and villas in Hyderabad and other cities by Modi Builders.
- Commercial property:
Commercial property has different characteristics. It is in between fixed deposits and equity with a lower risk and good possibility of amazing returns. The commercial property investors get 7-8 per cent monthly rental, which increases every year and a share of capital appreciation of property.
One can minimize the downside risk if the choice is made correctly. Commercial property investment can give returns anywhere between 15-25% per year with 8%. The annual rent escalation and lower tax regime make it a better investment option.
An individual has to pay 33 per cent tax on fixed deposit interest, but the rent is taxed at 21 per cent only. The capital gains from property are also taxed at 20 per cent only.
After doing a thorough market research, one can conclude that investing in commercial property is far more beneficial than investing in other sectors. Having several luxury villas for sale in Hyderabad and other cities, investing with Modi Builders can be a right choice, especially for first-time investors.