Checklist for buying commercial property in Mumbai

Checklist for buying commercial property in Mumbai

Commercial property is one of the most sound investments to make, provided you can afford it and you’ve done your due diligence regarding your investment. Mumbai is the commercial capital of the country and as such THE place to buy commercial property. Being a port city, the connectivity to the rest of the world by sea, especially for traders of heavy goods is excellent. Mumbai as a city also offers-the-buyer-an-excellent-return-on-investment, so here is your checklist for buying commercial property in the city.

Ensure that the property is in a good location: In terms of property, location is everything. Access to and from your commercial property to the city will be of paramount concern to future buyers or tenants looking to lease the place from you in the future. Conversely the better connected the industrial/commercial property is in terms of roads, proximity to rail and air transport etc. the more expensive it is going to be. So you’ll need to strike a balance between location and expense.

Always buy a property from the point of view of leasing it: Commercial real estate can start yielding good returns almost immediately. Always seek to buy commercial property, like a shop, storefront or gala from the point of view of leasing it. For all you know, the rent on the property will more than cover the EMI you will have to pay to the bank on the loan; considering that commercial properties command a higher premium than residential properties.

Do an affordability estimate: In order to be able to buy a commercial property, first and foremost do an affordability estimate for yourself, where you assess the kind of money you will have to commit to the purchase, the outgoings, by means of the EMIs on the loan and maintenance you will pay on said property and minus that sum from the expected earnings from the property in the form of rent. If the sum you derive is covers the EMI and leaves you with a little extra, rule of thumb say it is a good investment.

Reputation and clarity: Two things in real estate trump all else, the reputation of a builder and the clarity of documentation. If you’re looking to purchase a commercial plot off of a reputed builder, it will be of great help to you when you are applying to a bank for a loan. Ensuring that paperwork on the property is clear just makes good sense, as it will be in your best interests and protect your investment in the long run.

Speculative future: This is an important and huge consideration in buying commercial property. Unlike residential, where closer to the city centre is the thing to strive for, it isn’t always the same for commercial property. For instance Boisar, Vaitarna and Khopoli weren’t considered great investment options until suddenly several thousand manufacturing plants moved there, about 5 years back. Case in point, people who’d acquired properties here a few years ago, makes a small investment that has paid off several times over. So when buying commercial property, keep your ears open for the speculative future of the location you’re considering.

This simple checklist will go a long way in helping you buy commercial property in the country’s commercial capital.