Residential, Commercial, Industrial - Which Singapore Property Investment is Right for You?

March 15, 2024

Investing in a property in Singapore is a wise decision. The real estate market in Singapore is booming. The best part about investing in a property is that you can sell it at double the amount in the long run. However, when purchasing a property – you need to ask yourself one crucial question – what kind of property do you wish to buy? Residential, commercial or industrial? These three are different from one another, just as chalk and cheese. They don’t mix. And unless you know the difference, you cannot make the right choice. Today, we will discuss the differences between the three so that you can compare and then decide what kind of property you should invest in.

  • What are the significant differences between residential, commercial and industrial property?

A residential property means a house or an apartment. It may be for a single person, a joint family, or even a married couple. Popular residential properties are flats, bungalows, penthouses, townhouses and studios. You can buy such a property and reside in it as well. At the same time, you can also rent out the property to some other person. This means that although you own the property, you are not staying there; you have decided to rent it out.

The commercial property means a place that is rented out to organisations and companies. It generally includes office spaces, retail outlets, warehouses, restaurants and hotels. Commercial property owners run a business out of their space. You can also lease the property for a certain number of years. Generally, investors prefer to rent the property.

Industrial properties are one kind of commercial property. It comprises cold stores, warehouses, heavy manufacturing, distribution units, data centres, research and development wings, etc. The owner leases these properties out for several years at a stretch.

  • Do a detailed research before you invest in any one of these properties:

You must research before you go ahead and invest in any one of these proxies. Find out whether you will get a decent loan while buying it. Did you know that banks tend to lend a larger “loan-to-value” ratio for commercial and industrial properties rather than residential ones? Commercial properties are more extensive, more expensive, and have higher ROI. It is way easier to get a loan when you decide to buy a house. Unless you do oper research, you will never know about these things. Without a clear idea, deciding which property to invest in becomes difficult.

  • Return on investment - a vital factor to consider:

One of the significant reasons you invest in a property is to generate profit from it. Although purchasing a commercial or industrial property is way more expensive than a residential one, the demand for the former two is at an all-time high. Wondering why so? This is because the return on investment on commercial and industrial properties is always better than on residential ones. There will be someone or the other to rent a commercial space.

Summing it up:

If you are still confused about which type of property is ideal for you, contact real estate agents who will help evaluate the market and the existing trends. Accordingly, they will guide you so that you invest in the right property. Check out Singapore Property Wiki to know more about reliable real estate agents.

 

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