Avoid These Costly Errors When Purchasing Commercial Property in Gurgaon
Gurgaon has become a major business hub in India and is therefore an attractive location for investors and businesses alike. With solid infrastructure, direct neighbors with Delhi, and a booming economy, there are a lot of opportunities for Commercial Property in Gurgaon. However, purchasing commercial investment properties in Gurgaon is not easily done, nor does it elicit the challenges faced by many other business undertakings. As is true with many business investment acquisitions, the process of purchasing Commercial Property in Gurgaon is a difficult endeavor, at best. Consequently, if the investor does not adequately do the necessary homework and have an understanding of the area in which they are investing, they can easily make mistakes that can cost them thousands of dollars. This article will identify some common mistakes that property buyers make to avoid these and to ensure an astute investment.
1. No Research on Location
When it comes to commercial property, location is everything. Unfortunately, many buyers only consider the purchase price and never examine the location. A property located in a prime area, even if it is more expensive, will yield improved returns with rental and long-term valuation.
How to Avoid It:
Before making a purchase, conduct thorough research on the area. Consider distance to business areas, transportation hubs, development plans, and infrastructure (roads, public transportation, amenities… banks, restaurants, shopping centers, etc.). Areas with good infrastructure generally attract businesses and customers.
2. Overlooking Future Growth Potential
Gurgaon’s growth is ongoing, and numerous areas of the city are currently under construction. Buyers continually make the error of purchasing in areas that look appealing at the moment, but with little to no long-term growth potential. Conversely, the greater long-term returns can generally be had when the area is slated for future development or expansion.
How to Avoid It:
Research the city master plan and urban infrastructure proposals. New metro lines, office/business parks, and highways mean that more commercial requests are anticipated for specific locations. Be sure the property location you are exploring has growth potential and is not in an area that is about to go out of business.
3. Failure to Verify Legal Documents and Titles
One of the most typical yet most costly mistakes with real property transactions is neglecting to ascertain the legal status of the property. As is the case with properties anywhere else, properties in Gurgaon may come with legal headaches and title issues, possibly past-due property taxes, or unclear ownership. Ignoring legal property status may result in lost funds on behalf of the buyer, or a nasty lawsuit.
How to Avoid It:
Before making a property purchase, always do a thorough background check of the legal documents of the property. Consider hiring a property lawyer to ensure the title is clear and that there are no disputes. Ensure that all dues, taxes, and any other outstanding financial responsibilities are cleared prior to purchasing the property. Legally verifying these areas of a property will avoid future headaches.
4. Underestimating the Total Cost of Ownership
While most buyers will likely focus on the purchase price as the main cost of owning property, it is essential to comprehend the total costs of ownership. These costs can include maintenance fees, property taxes, insurance, renovation or capital improvement expenses, etc. Not accounting for all of the ongoing costs can quickly diminish your profits.
How to Avoid It:
Consult with a financial advisor and develop a range of estimates to calculate the total cost of owning the property. The calculations should include any regular maintenance costs, property management fees, security, insurance, etc. In addition, consider potential renovation costs in the event the property will need to be upgraded. Completing a thorough cost estimate will help in making a more informed decision.
5. Not Assessing Market Trends and Demand
Commercial property values in Gurgaon can be influenced by economic conditions, demand for industry, and other market factors. If you purchase a property oblivious to these trends, you could find that you made a poor investment. For example, if you made a purchase during a market slump, your prospects for getting tenants or any rental income could take significantly longer.
How to Avoid This:
Understand the market trends for commercial real estate in Gurgaon. Talk to real estate experts who can help you identify what the current demand is for commercial real estate. Future property values can be affected by demographics (e.g. economic conditions, demand for office space, growth of certain industries like IT or retail). You want to purchase when you think the market is about to shift in your favor!
6. Skipping the Property Inspection
While in the excitement of getting a great deal, many buyers either skip the property inspection or only do a cursory inspection of the property when they purchase a property. This can ultimately lead to problems down the line…potentially thousands of dollars in repairs when there are hidden defects like structural problems, old electrical or plumbing systems, safety issues, etc.
How to Avoid It:
Do not skip a full inspection of the property. Make sure to hire a professional surveyor or engineer who can advise you on the condition of the property. Check for structural integrity, wiring, plumbing, and damage like leaks and mold. The more thorough the inspection is, the more assurance you will have with buying a property, and you can often avoid substantial repair costs later on down the line.
Conclusion
Buying commercial property in Gurgaon has many potential benefits for investors, but the process must be handled with caution and diligence. If you can eliminate the problems discussed in this article, you can avoid serious mistakes that will cost you in time and money and that will minimize your return on investment. Thorough research, engaging qualified people and being aware of the legal, financial and market aspects will always serve you when investing in commercial property.