Reasons to Invest in Commercial Property
10 Reasons to Invest in Commercial Real Estate
There are people who are afraid of investing in commercial real estate properties. Why? They are scared of the bad press and the changes in the economy.
However, commercial real estate investing is a great investment because it helps expand wealth.
Why do people fail when investing in real estate? They select wrong real estate properties. They hire wrong real estate agents. They do not know how to invest in real estate. They do not have mentors. They select wrong tenants. And they use wrong real estate companies.
The following are the reasons to invest in commercial real estate properties:
1. Investor Control
You have higher control when investing in commercial real estate property. You do your own research when looking for the right property. And you handpick the best properties. Commercial real estate investing is not like investing in stocks.
2. Regular Stream of Income
Want a regular stream of income? Invest in commercial real estate properties. The regular income comes from leases.
In fact, commercial property leases are expensive. They are not like renting a residential property. And tenants in a commercial property usually stay for a long time.
It is very rare to find a vacant commercial property. So, the income from commercial real estate properties is consistent.
3. High Appreciation
Thirdly, commercial properties appreciate faster. Want to increase the value of your commercial properties? Make the necessary improvements, but make sure that the improvements do not cost a lot of money. Doing the necessary improvements make your property look more appealing. And it increases the appreciation of your property.
4. Ability to Leverage
How do you increase your wealth quickly? Use leverage. How? Use other people’s money.
It is easy to get a loan on a commercial property. Use the money to buy more properties. As you buy more commercial properties, your wealth increases.
5. Intrinsic Value
Commercial properties have intrinsic value. However, this is not the case with other investments. Investing in commercial real estate properties is more stable than investing in the stock market. Commercial real estate investing is less risky, but it has high rewards.
6. Tax Benefits
There are a few investments that offer tax benefits. For example, real estate investing.
What are the tax benefits in real estate? The depreciation deduction and mortgage interest deduction. These two lower your tax bill. And they offset your income stream.
However, it is hard to understand all the tax benefits. So, work with a tax professional who understands all the tax benefits.
Do not use real estate investing to avoid paying tax. It is costly because you will be caught.
7. Less Competition
Hate competing with other real estate investors? Focus on commercial real estate investing. Why? Because there are a few investors investing in commercial properties, so the competition is less.
It is hard to compete in a residential market. If you hesitate, another investing investor will get deal you have been working for several months.
8. Less Maintenance Call-outs
Planning on managing your commercial properties? It is easy to manage commercial properties because businesses operating during normal business hours. So, it is hard to get calls in the middle of the night. And there are businesses that have a team that deals with these issues.
However, residential properties are hard to manage because tenants call anytime there is a burst pipe or a broken lock. There are tenants who work from home, so they always call their landlord when there is a problem in their home.
9. Better Tenants
There are residential tenants who are sensible, responsible, and caring. They abide by your rules. They respect your property. And they look after it.
However, there are residential tenants who are always late on rent. They break your property. They do not abide by your rules. And they are noisy. It is hard to deal with these tenants.
Want to minimize this risk? Invest in commercial real estate properties. Why? Because business tenants are concerned about the appearances of their offices and stores. They take great care of their offices because they want to impress their clients or customers.
10. Longer Contracts
Businesses do not change their commercial address regularly. They stay in one commercial address for as long as possible. So, businesses sign longer contracts, especially if their clients visit their offices regularly. For example, high street clinic or a store.
Residential tenants can move anytime they want. They can move into a bigger house anytime. And there is nothing you can about it. And there are people who are in temporary jobs. So, when their contract is complete, they move to another town or city.
These are the top reasons to invest in commercial real estate properties. Invest in commercial real estate properties if you want a regular source of income, better tenants, fewer maintenance call-outs, tax benefits, and less competition. Take professional advice on investment from 3CRE, a best commercial real estate company in Cincinnati. Commercial properties have a high appreciation.