The best way to spend money is to invest in something that will generate profits and entrepreneurs these days are becoming a lot more confident in investing in real estate properties rather than purchasing stocks. Any property whether it’s commercial or residential is a good investment however there are some obvious pros of investing in a commercial property rather than residential. Here are 4 top reasons why you should consider investing in a commercial property if you are looking to invest in real estate at all.
But first, understand what commercial properties are. Commercial properties include retail buildings, office buildings, warehouses, industrial buildings, apartment buildings and also mixed use buildings, where the property may have a mix of everything such as retail, office and apartments.
Yes there are cons to managing such huge properties but the pros definitely outweigh the cons. Moreover you can always begin with a smaller commercial property that requires lesser effort and management.
- Income Potential
The biggest reason to invest in a commercial property is the annual income potential it could offer which is usually much higher than a single family home property. Depending upon the area the commercial property is located in you can get an annual return off your investment between 6-12%!
- Stable Profits
Not only is your income potential through commercial real estate higher than investing in a residential property but it is one way of earning without any risks, the stable profits you may say. Unlike investing in a stock market where you are never sure about how things will turn the next minute, the stability of your profits from a commercial real estate depends on you alone.
- Tangible Assets
Investment in a commercial property comes with lesser risks compare to investing, say in a stock market. We all know how risky it is to invest in stocks; you can be a millionaire one day but can go bankrupt the next day! That is not how high the risk is with commercial real estate investment. You will have the assurance your investment will not be gone overnight. It’s an asset that you can rely on unlike stock exchange.
- Limited Hours of Operation
Handling a commercial real estate property is not like the usual 9 to 5 job or even a regular business. You are not operating a business that needs your presence for a certain time period for each day; you have invested in a property which is now rented by a tenant. You won’t be disturbed by them every day for petty things and chances are the only interaction both the parties have is once a month while clearing rent and other maintenance issues.
A lot of people do not consider investing in a commercial property as their first option when in fact they should. It’s an excellent investment that can have less risk for the money that you will produce. It’s hectic but investing in the right property you can be a successful real estate investor.