Reasons why NRIs are moving to Indian Commercial Real Estate ✓ Growing market ✓ Urban development policies ✓ Growing demand for office spaces ✓ MNCs in India ✓ Government reforms in favor of Foreign Investors
Commercial Real Estate: The Ultimate Investment Asset for Highest Passive Income
The pandemic taught us many important lessons, but most of all, it reminded us of the importance of having multiple income sources, especially a large corpus of regular passive earnings to keep us afloat in case of emergencies.
Talk to any avid investor or investment expert, they will emphasize the importance of having multiple passive income sources. This is so because relying solely on your 9-5 job to pay your bills and live a comfortable life can be very difficult in today’s time, not just that, you might not even have a lot saved up for your retirement or an unpredictable economic shutdown like the pandemic.
Importance of a Passive Income
A good regular passive income ensures financial stability and security; it also gives you a sense of freedom, so you don’t have to think twice before spending money in most cases. And since it is not dependent on how many hours you spend working, the passive income also helps share financial burdens and reduce stress in your life.
Real estate is one of the best sources of passive income. Here’s how you can take advantage of this investment asset.
Commercial Real Estate for Passive Income in India
Commercial Real Estate means purchasing, or investing in commercial properties such as apartment buildings, hotels, vacation homes, resorts, and office spaces to earn high rents or income.
Benefits of Investing in CRE
In the pandemic, we saw the stocks fall, share markets crash and funds go under losses, although the real estate sector did suffer, it was also one of the earliest to bounce back.
This was so because commercial spaces are usually leased for longer durations, and as long as the property is occupied by a company, they are bound to pay rent.
Not just that, during the pandemic, many MNCs also started to shift their bases from China to India, as more and more MNCs keep coming in, we are expected to see a greater boom in the market making it a great and safe investment.
- Asset appreciation
One of the biggest upsides of investing in any form of real estate, especially CRE is that they form a hedge against inflation. Since land is limited and our demands unlimited, the price of a real estate property cannot fall.
- High Returns
Most investors are looking for a low-risk high-return investment option at all times. While both risk and returns go hand in hand, CRE has proven itself to be a safer and high returning investment option. If you approach CRE investments through Assetmonk, you can also enjoy an annual IRR of up to 21%.
- Long-term goals
As CRE properties are leased to businesses or MNCs for over ten years, these are perfect long-term investments.
- Dual income
A CRE investment earns via property income, profits from ownership of capital, rent via ownership, and the capital also grows via asset appreciation.
Fractional Ownership CRE
Commercial real estate properties are usually worth hundreds of crores, making them inaccessible to middle-class investors. But as technological advances take over the real estate world, novel investment ideas such as Fractional ownership and Crowdfunding come in to democratize the investment system.
Fractional ownership in CRE is an investment system where many individual investors come together to pool their capital and purchase a real estate property. Here the investors become owners of the fraction of property based on their investments and the burden of investment; risks, as well as returns, are shared amongst all investors.
Since in fractional ownership you can invest an amount as little as Rs. 25 lakh, this makes the investment very cost-efficient, also the investment offers dual returns, firstly, the returns that you earn directly from the investment, and secondly the benefits of asset appreciation. As you are part owner of the real estate property, as the property appreciates, the price of your share will also rise.
Assetmonk, the smart WealthTech platform simplifies the CRE market for you. The company offers high-end A-Grade investment deals to its investors in the forms of fractional ownership and crowdfunding.
Fractional ownership in commercial real estate is gradually gaining popularity as one of the mainstream investments. It has already started setting roots in metropolitans such as Chennai, Bangalore, and Hyderabad, the IT bases of India. As more and more MNCs move to the Indian market, fractional investors will have many new investment options opening up for them. Visit the Assetmonk website to stay updated.
Passive Income Through Commercial Real Estate Investment FAQ'S
Yes, as commercial real estate properties usually generate high returns, they can make ideal sources of regular and passive income.
A passive income in real estate is generally the money you make from investing in real estate on the side, that means besides your regular job when you also earn money from CRE it is counted in passive income.
When you invest in a CRE property, usually the profit it makes by either collecting rents or building retail shops, etc counts as passive income on real estate.