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Why Should You Invest in Commercial Real Estate?

Posted by bethkua on May 25, 2016
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Commercial real estate may be an intimidating investment option, but it can also very well be worth the trouble. If you’re serious about getting the most bang for your buck in the property market, there’s a lot of potential in commercial properties like office buildings, mixed-used buildings, warehouses, and so on.

Here are some of the most exciting reasons why you should give commercial real estate investments a closer look.

Commercial Has Huge Income Potential

One easy argument is the huge income potential presented by commercial properties. Real estate is generally thought of as a wise investment opportunity on any scale. Still, commercial properties outshine residential in terms of potential earnings. A commercial property can yield as much as 12 percent annual return off the purchase price, as compared to only an average of 4 percent for residential, depending on the area.

Cooperative Upkeep

No responsible business owner would tolerate a messy store and storefront. To do so would affect the satisfaction level of their customers, and consequently threaten their bottom line. In this desire and effort to keep the property orderly, safe, and attractive, you and your tenant are on the same boat. This shared interest between you and your lessee will help you maintain the good condition of your property and protect the value of your investment.

But remember, choose your tenants wisely.

Professional Relationships with Tenants

Commercial properties aren’t personal like residential properties, which is prone to emotional pricing. With commercial, evaluating property prices is simple and upfront. For example, in negotiations with your lessee, you can request for the income statement of the business, which will then help you assess the credibility of the lessee. This paves the way for a more business-to-business dealing where both parties are supporting the other’s continued success.

As with any investment, one must study the opportunity carefully before jumping in. Consult with a real estate broker you can trust for the best commercial properties in your area.