higher rental yield and returns
low rental yields / rental incomes
fast ( 20 to 25 % ) annual
slow ( 2 to 5 % ) annual
Minimal or None
Mostly Needed
Rana sb, Generally true but not sure about:
Rental Yield, as Yield is proportional to the capital investment so higher the investment, higher the yields.
Also, 2% to 5% are very conservative figures and somehow out of date, on average.
The more neutral picture must also include
- Transfer Fees & Taxes
- Property Taxes
- Liquidity
- Residential maintenance depends on the type of agreement or lease. White washing and etc. are part of rental agreement but the broader term 'maintenance' for any physical deterioration must be payable by one who caused it and hence the security deposit.
- Surplus commercial can be a disaster than a blessing.
So, the conclusion is it needs more objective criteria to assess commercial vs residential.
Yes for commercials rents can be much better and appreciation but all above points and more importantly the demands matter the most.
Commercial sector have many dynamics and factors like my relative had shops in a plaza opposite of Ghakhar plaza,Rwp and k he was getting a rent of ~150k but since 2 yrs the rent depreciated to ~92k. That seems due to,
-1 More Malls & Markets are opened like in PWD,DHA and BT
-2 Shift of a specific working class to the DHA & BT
-3 Overall Saturation of commercial property