From Hans India
Investing in real estate is always been regarded as the best option. It is the most perfect ‘hedge’ asset. More so, the commercial property is lucrative investment option than a house property. (A hedge is an investment to reduce the risk of adverse price movements in an asset.)
Although the eligibility criteria is almost the same that of residential property, the main differentiator would be the loan amount is restricted to 55 per cent known earnings of the loan seeker, while in case of residential property the ratio will be between 75 to 90 per cent. It means the borrower needs to bring about 45 per cent of the property value.
The other difference would be the higher interest rate. The lenders charge about 1 to 5 per cent more interest than the residential property loan. Further, the lenders will be more particular about the builder profile, especially in case of under construction property as the lenders will see the delivery-schedules followed by the builder.
The building must have all the facilities such as lifts, shafts, fire-extinguishing facilities, emergency exit, staircase, etc. The tenure of loan would be restricted to 10 years, unlike residential property of 30 years.Despite all the odds, the investment in the commercial property would be lucrative considering the ‘return’ on the investment, which is always been on the higher side. Hence, choose the commercial space and if it is eligible for funding, don’t miss it.