- January 13, 2022
Not just real-estate in Ahmedabad but all over the country have seen several changed trends in the past couple of months. One such changing trend is the leaning towards renting or buying pre-leased property. This change is witnessed in both commercial properties and residential properties.
Simply put, a pre-leased property is one that is already occupied by a tenant and is then put up for sale in the market. Once the sale comes through, the lease is passed on to the new owner who then becomes the new owner who then gets the legal right to receive all the lease rentals in the future.
With many wonderful and established builders in Ahmedabad, the market has opened to buyers considering pre-leased property as a wonderful option for their purchases.
So what are the benefits of purchasing a pre-leased property in Ahmedabad?
1. No Waiting Period
The advantages of a pre-leased property is that there is immediate Return On Investment. When there is already a tenant, the income for the buyer starts as soon as the lease deed is transferred to the new owner. Be it a luxury apartment or a budget friendly home, there is immediate return.
2. Capital Appreciation
As mentioned, typically, the pre-rented unit’s value increases overtime. Add to this it being a luxury home in a premium location of Ahmedabad or a posh commercial complex in Ahmedabad, the property costs are definitely going to escalate. Sometimes when the buyer has a better time horizon and can hold onto the property for a longer period of time then the buyer can possibly experience better appreciation on the pre-leased property.
3. Easy Liquidity
Real estate properties don’t usually generate income immediately. In this scenario, a pre-leased property is a wonderful option that offers investment opportunities as well as easy liquidity right from the beginning. In case of popular retail properties in Ahmedabad, there is a substantial pre-leased market for buyers to invest in.
Since the pre-leased property is usually sold with a previous contract between the owner and tenant for a stipulated period, it guarantees returns for a specific period of time. According to experts, this yield on a residential property can range between 3 and 5 percent in residential property. This is also safe because there are lesser chances of the tenant vacating the property before the lease contract ends.
5. Maintenance Of A Pre-Rented Property
Usually in the case of a pre-rented property, the responsibility of maintaining the property is that of the tenants. This comes as a blessing as it rids the buyer of the huge job of maintaining the property.
6. Easy To Pay Taxes
Paying taxes on a property that does not yield an income can be difficult for homeowners. When the property is pre-leased, it makes it easier for the owner to pay taxes on the property since the property is already generating an income.
Along with all these benefits, pre-leased properties come with their disadvantages. These could vary from inflated cost of the property as compared to other similar properties in the area. There’s also the fact that over a period of time, the rent appreciation might be lower than the capital appreciation of the property. This means a smaller and smaller percentage of the property value is recovered every year. Needless to say, it is important for the buyer to weigh his pros and cons before investing in a pre-leased property.
Builders in Ahmedabad like Sheetal Infrastructure offer budget friendly as well as luxury homes for purchase in some of the most prime locations of Ahmedabad.