Benefits of Investing in a Pre-Leased Property
If you’re wondering what a prerelease or pre let property is, it is a commercial or residential properties which already have an existing tenants for a longer period of time. When purchasing a property, the purchaser is guaranteed an income from the first day itself. Buyers buy all bonds from their tenants, so there is no delay in expected revenue.
There has been a great shift in investors opting for pre-let properties for investment over the last few years. As Investment in pre-leased commercial property is the new hue of the real estate market, you need to understand & analyze all the hues of this market by knowing the top 5 reasons why you must invest in pre-leased properties.
There are many reasons for investing in pre-leased properties, some of which are explained below:
1. Instant ROI
- As these properties already have tenants, so the investors don’t have to hustle searching for the tenant.
- This cuts down the whole process of hunting for tenants and investors immediately start earning monthly rentals after the transfer of the lease deed.
2. Easy Loans
- As preleased properties are very promising in nature, an investor can avail up to 90% of the entire price as loan.
- This is a tool that enables buyers to invest in property with the highest returns.
3. Capital Appreciation
- Pre-leased property may also promise you an appreciating value with time apart from guaranteed rental income.
- The location of your property is important factor here- if your property is located at a busy, or potentially busy place, then it is more likely to give great return on investment with time.
4. Rental Hike
- Existing lease agreement allow you to estimate an increase in rental income from a pre leased property.
- Even if some tenants move out of the property after a period of time, you can be confident that the next tenant will start at the current market price. This does not affect your income.
5. Risk Averse
- A commercial pre leased property can assure you 9-12% returns whereas a residentially pre leased property gives up to 5% returns.
- Investors are being offered a guaranteed income and attractive returns, reducing the risk involved in investing in pre-leased properties. It is always unlikely that a tenant will move out of these properties before the contract expires.
It is the stability of pre leased property that has made it attractive in the past few years. In the current market scenarios, it is a wise investment decision and the ‘zero’ waiting period for the return on investment makes it a wonderful choice.
If are still confused and have queries related to your property investment plans, you can always contact professionals at Quest Real Advisors. They will guide you through making an informed investment decision.