The 7 Reasons to Invest in Commercial Real Estate
An investor in real estate may be torn over whether to invest in residential or commercial real estate. Though both offer returns on investment, venturing in commercial property has been identified to be better. Let's take a look at the 7 advantages that make commercial real estate the best among the two options.
Rental income in FCE commercial property is based on each square foot that a particular space occupies. As a result, the returns on investment are quite high. With residential real estate, rent is calculated based on different factors altogether, meaning that your returns may not be that good.
The fact that most businesses operate for select hours of any given day means that property management is eased considerably. It is unlike in residential property where you may be called in by tenants late in the night to deal with certain problems. When compared to residential property, commercial property management costs by a professional firm will be much lower in the latter.
Your tenants may sign leases through fallschurchestate company for as much as 10 years, which means that you will benefit from a consistent income stream for such lengthy periods. It is in contrast to residential home leases that barely extend beyond 12 months in a majority of the cases. The fact that a business organization is not likely to move its offices from building to building in the short-term means that there are high chances that the lengthy contract will be renewed when it expires.
Commercial properties' asking prices are set objectively in all cases. It means that you will base your offer on what the current building owners earn from the rent collected. Investing in residential real estate is another issue altogether because property asking prices are based on all sorts of factors.
The relative costs of maintaining a commercial property are very low when compared to those you may incur if you invest in family homes. The chief reason is that commercial enterprises are concerned about image and, so will take care of your property in the best way they know. Also, the long leases involved help in this respect because your building will look good all along.
There are fewer risks in commercial property when compared to their residential alternatives. Missing rental income from several of your commercial units will not cause a significant impact on your finances. On the other hand, your losses could be significant if your only rental family home falls vacant. You can also grab more property investment information from http://www.ehow.com/personal-finance/real-estate/.
When it comes to investment funds; you will spend relatively less on commercial property than on family homes. As a consequence, you will start getting returns fast.
