Buying residential and commercial property do not require the same type of investment and involvement in the long run. And two good investment opportunities in Singapore are Cuppage Plaza and Parklane Shopping Mall.
When you have some money and are looking at investing it, knowing which type of investment to make can be a tough situation. While residential and commercial properties are often easy buys that can be attractive to first-time investors, there is still a clear distinction between the two when it comes to investments.
So, which one is the safest bet, and is there one which will bring more profit in? Let’s have a look below.
Residential property investment
Residential property investment means that you buy a house or an apartment, usually with the intention to rent it out. Afterwards, you will have to take a while to start making a profit as you need to wait for some time until the payments cover the sum that you paid for the apartment.
Another way of getting a good return on investment with residential property is to buy, rent it out for a few years, and sell it when the market prices have increased. You will then get more money than what you had chipped in, to begin with.
However, times have changed in Singapore as the residential market prices do not increase as dramatically as they used to some years back. As such, if you buy a residential property today, you can expect a yield of around 2 to 3% while renting it.
Commercial property investment
Investing in commercial property follows the same principle as investing in residential property, except that you’re investing in shops and restaurants instead of an apartment. While both of these properties are similar in a sense, there are still some differences between both of them.
The first big difference is the price you will have to pay. Indeed, commercial properties are usually more expensive than residential units and thus require a bigger investment in the beginning. Moreover, it is not possible to use the cash you have saved in your CPF to buy a commercial property.
Still, on the other hand, taxes are lower on commercial properties than residential properties and can be more interesting to manage if you are interested in it. Also, relationships with the tenants are more different when you own a commercial party as you get to interact with them directly.
Which property should you invest in?
In Singapore, there are many good commercial properties to invest in. Nevertheless, some are better than others and below are two properties that you should invest in.
Parklane Shopping Mall
This mall is on a 99-year leasehold and is located in one of the best areas in the city and is a walking distance from Dhoby Ghaut, Bras Basah and Bencoolen MRT stations. It is also considered one of the busiest shopping areas in Singapore which will ensure a lot of traffic to your unit.
Just like Parklane Shopping Mall, the Cuppage Plaza is situated in the Orchard Road neighbourhood and naturally brings in a lot of pedestrian traffic, which means a lot of potential buyers for you.
Owning a food and beverage unit in Cuppage Plaza can be particularly interesting, as many people come there for KTV entertainment, and are looking for a meal and refreshments after a night of fun.
Needless to say, both residential and commercial properties have their own pros and cons. So, there’s no harm in buying either of these properties. Just make sure you evaluate your options clearly and invest in a property that will benefit you greatly.