In an age where financial stability is hard to achieve, more people are making the decision to go beyond what they earn at work and to start making investments. One of the most profitable investments to date is real estate. It involves purchasing, managing, renting out, or selling properties for profit.
Real estate investors usually start out with the acquisition of residential properties simply because it is what they have grown used to. However, investing in commercial properties also has its own perks.
Commercial real estate cash flow
The income commercial properties generate is usually directly related to each square foot used in the area. This isn’t always the case with residential properties. Similarly, investors would usually have more than one tenant in the commercial property they are renting out, making it less risky than residential properties which are usually occupied by only a single family at a time. The more renters a place has, the greater the chances at making additional profit and achieving ROI much faster than originally projected.
Longer lease duration
Contracts involving commercial real estate usually last much longer. This means investors will have a more stable and steady cash flow out of rental agreements. And should a renter decide to leave, there will be others remaining, so the lessor loses only a portion of the income generated through that property.
High appreciation rates
The appreciation value of commercial real estate exceeds that of residential properties. There are many factors that can affect it too, such as increasing the desirability of the property through making improvements that make it more usable and attractive to potential renters.
Taking the time to learn the ropes of commercial real estate investing promises a rewarding outcome, both personally and financially. It is also a great way to balance out your investment portfolio. For assistance in finding the right property for you, contact your nearest business real estate broker today.