Vacancy rates in commercial land can seem like a mystery when we look at them in isolation. But they’re an indicator of the economy and growth around it. They also interact with other aspects of the property and help us anticipate how it'll perform in the future. Real Estate Investment GroupAs a thumb rule, anything below 10% is taken into account a healthy rate and anything less than 5% is considered excellent. including the grade of the assets available, vacancy rates can tell an investor about the probable way forward for investing in an asset. allow us to explore how vacancy rates work and understand them better.
Why Understanding Vacancy Rates in Commercial land is Important
Property meant for rental or leases should ideally avoid vacancy. within the context of residential real estate, this suggests a death blow to profitability for independent investors and landlords. Tenant turnover, for commercial land (CRE) and residential real estate (RRE), is damaging. Real Estate OpportunitiesA vacant property draws in costs like – maintenance, advertisement, management, cleaning, and even mortgage payments (in some cases). If one considers a mean residential flat of 2000 sq. ft., the time and resources involved within the upkeep can easily amount to a monthly cost of INR 1000-3000 in most urban areas. If that's considered as a benchmark and commercial spaces with better ventilation, carpet areas, meeting rooms, cafeterias are added to the equation, the monthly expenses can come up to a minimum of INR 30 per square foot of the area involved.
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