How to Profit from Commercial Space: Profitable Trends & Investment Strategies in Commercial Property

zajpreneur By zajpreneur
6 Min Read
Bagaimana Cara Meraup Untung dari Ruang Usaha: Tren & Strategi Investasi Properti Komersial yang Menguntungkan
Bagaimana Cara Meraup Untung dari Ruang Usaha: Tren & Strategi Investasi Properti Komersial yang Menguntungkan

jlk – Investing in commercial property, which includes properties used for business activities such as offices, shops, warehouses, or hotels, is one way to generate promising passive income.

However, this investment also comes with challenges and risks that cannot be underestimated. How do you choose, purchase, and manage profitable commercial properties? Let’s explore the following review.

Commercial properties in Indonesia have a fairly bright prospect, although they have been affected by the Covid-19 pandemic, which has hindered economic activities.

According to the Commercial Property Development Report (PPKOM) by Bank Indonesia, the Residential Property Price Index (IHPR) for the fourth quarter of 2020 increased by 2 percent annually, higher than the previous quarter’s 1.5 percent.

- Advertisement -

This increase is driven by the recovery of commercial property demand along with the easing of social restrictions and government stimuli.

Some sectors showing positive performance include office properties, retail properties, and industrial properties. Meanwhile, the hotel property sector is still under pressure due to a decrease in tourist visits.

Several factors influencing commercial property trends in Indonesia include:

Infrastructure development, such as toll roads, airports, ports, and mass transportation, which facilitate accessibility and mobility for society and businesses.

Technological advancements, such as the internet, e-commerce, and digitalization, which trigger changes in consumer behavior and business models, as well as increase efficiency and productivity.

- Advertisement -

Demographic developments, such as population growth, urbanization, and the middle class, which increase demand for quality commercial properties that meet lifestyle needs.

Regulatory developments, such as tax policies, licensing, and incentives, which affect the investment and business climate in the commercial property sector.

Profitable Commercial Property Investment Strategies

Investing in commercial property requires careful and thoughtful strategies because it involves significant capital, high risks, and fierce competition. Here are some strategies you can apply to profit from commercial property investment:

- Advertisement -

Choose the type of commercial property that suits your goals, capabilities, and interests. There are various types of commercial properties, such as offices, shops, warehouses, hotels, apartments, shophouses, malls, and others.

Each type of property has different characteristics, markets, and prospects. You should consider factors such as income potential, operating costs, risks, and competition.

Select strategic and prospective commercial property locations. Location is one of the main factors determining the success of commercial property investments.

You should choose locations with good accessibility, close to business centers or economic activities, with high population growth and infrastructure, and high demand and low supply.

Conduct market and financial analysis before purchasing commercial property. You should conduct in-depth research on market conditions, trends, and projections for the commercial properties you want to buy.

You should also perform financial evaluations, such as calculating investment returns, cash flow, costs, and taxes. You can seek professional assistance, such as real estate agents, consultants, or accountants, to help you in this process.

Utilize financial leverage to increase your capital and profitability. Financial leverage is a technique of borrowing money to purchase commercial property with the expectation of earning greater profits than the loan interest.

Financial leverage can help you buy larger or more commercial properties with limited capital. However, financial leverage also carries significant risks, such as default, rising interest rates, or declining property values. Therefore, you should be cautious in using financial leverage and ensure that you have sufficient cash flow to repay loan installments.

Manage your commercial property well to increase its value and income. You should perform maintenance, repairs, or renovations on your commercial property regularly to maintain its quality and attractiveness.

You should also seek and retain quality tenants who can pay rent on time, maintain the property well, and commit long-term. You can use professional property management services to help you manage your commercial property.

Investing in commercial property is one way to profit from commercial space. Commercial properties have great profit potential, but also significant challenges and risks.

You must have careful and thoughtful strategies in choosing, purchasing, and managing profitable commercial properties.

You should also keep up with the trends and market developments of commercial properties in Indonesia, which are influenced by various factors such as infrastructure, technology, demographics, and regulations.

That’s all for now Kisanak.

Share This Article