Want to buy Commercial Office Space - This is the right TIME Part-2

Continued....

As per industry estimates, Mumbai office rentals have declined significantly over the past two years. Rentals in Nariman Point declined by a maximum of 14% from 2008 peak levels, and currently range from Rs 200-400 per sq.ft. per month. In the IT hubs of Gurgaon and Noida, rentals declined by almost 25% from 2007 peak levels, but have since stabilised. Hyderabad was one of the worst affected, as rentals dipped over 35% from peak-levels.

Investors who want to invest in rental yield funds should re-focus their investment strategies
around rental income rather than property appreciation, which has been the case for most investors up till now. However, experts point out that the tax implications of investing in rental yield funds may turn out to be cumbersome.

“Rental yield funds have huge tedious tax implications. Investors will have to pay tax on income generated by way of rental yields. Moreover, expenses are high on such funds and are payable upfront to the fund manager,” said independent financial planner Gaurav Mashruwala. According to Mr Mashruwala, such funds will do well if asset are bought at lower price levels or just after a deep correction.

Source: Economic Times