Are you also one of those serial property investors looking forward to investing in preleased properties? The property market is booming, and it has the potential to grow even more. 

However, to invest in the real estate market, you must evaluate all the aspects properly. Your risk-bearing capacity, investment timeline, investment category in real estate, etc., are some essential factors to consider. 

That brings us down to the question, should you invest your hard-earned money in pre-leased property? Let’s look at what pre-leased properties are and what are the benefits of investing in this new class of real estate. 

What are pre-leased properties? 

A pre-leased property is a type of property that already has a lessee at the time of sale, and it keeps on generating a steady return. Moreover, when the property is sold, the lessee is also transferred to the new buyer. Generally, pre-leased properties are occupied by large businesses. However, it can also have other tenants such as MNCs, etc. 

One of the benefits of preleased properties is that with credible and trustworthy tenants, capital appreciation is easy over some time. If as an investor you are looking for steady returns across your investment timeline, pre-leased properties can be the best source. 

The market for pre-leased properties is growing exponentially. More and more investors are moving towards the category as they are aware of the plethora of benefits offered by pre-leased benefits. 

Let’s look at some of the benefits of pre-leased properties in brief. It will help you decide whether you should invest in this real-estate category or not. 

The different benefits of investing in pre-leased properties 

  • Instant cash inflow 

The first benefit of pre-leased properties is that an investor doesn’t have to wait for capital appreciation. Right from the first day, once the lease deed is transferred to the tenant, you can start earning the rent. This benefit of zero waiting periods helps users avail the benefits of buying pre-leased properties quickly. 

  • Rental hikes 

Rental hikes are also one advantage of investing in pre-leased properties. Generally, after lease renewal, there is a rental hike. The annual rental yield of pre-leased properties ranges between 6%-8%. 

Therefore, you don’t just get the benefit of steady returns but also appreciated returns. Steady returns are next on our list of benefits. 

  • Steady monthly income 

Most investors are looking forward to steady monthly returns on their investments. After buying the commercial pre-leased property, steady and fixed monthly returns are included in the deed. You are entitled to fix rental incomes throughout the validity of the lease. 

Moreover, after lease renewal, the rental income appreciates which is a good sign for an investor.

  • Capital appreciation 

Due to the location of commercial pre-leased properties and the rich facilities that they offer, capital appreciation associated with pre-leased properties is high. Moreover, that’s also the reason why location is considered to be one of the prime factors before investing in a pre-rented property. 

  • Less risk to bear 

Lastly, another benefit associated with buying pre-leased properties is that the chances of risk are less compared to other real-estate investment categories. If you are renting our commercial pre-leased properties or other categories which excite a business, you will have a lease tenure that lasts at least 5-10 years. Since you know that the tenant will occupy space for such a long duration, you can accept steady returns for a while. Moreover, if the lease terms are violated and the tenant leaves early, you can charge a penalty amount as per the terms. 

These are some benefits one must consider before investing in a pre-rented property. These are the benefits because more and more people are moving towards investing in pre-rented properties. 

However, if you are interested in buying a pre-leased property you must be knowledgeable about the different factors that affect the pricing. 

Essential factors to consider while assessing a pre-leased property 

  • Location 

Location affects the price of the pre-leased property. While choosing a pre-rented property, go for a location connected to the city. Choose an area where you have good football and accessibility. Such pre-rented properties have better value compared to other locations. 

  • Lease period 

Longer lease periods are also essential for steady, long-term returns. Before renting out your property fix a lease period that suits you and the lessee. Always keep in mind that finding a new tenant is a tiring process, and you should avoid it. 

  • Tenant quality 

The tenant quality also matters in a pre-leased property. You must conduct a background check of the tenant and also check his financial position. This is essential to a hassle-free financial relationship between both parties. 

Before buying a pre-leased property, make sure to check these factors. These factors will help you determine the right value of the property. However, it’s always advised to seek professional advice when it comes down to investing in pre-leased property. This blog should help you understand the benefits of investing in a pre-leased property. However, perform a deeper analysis to be aware of every factor involved. As of now, the real-estate sector is booming, and with the way it is growing, the future looks even brighter!