A common question among investors is “What are the advantages of investing in commercial real estate compared to other investment options?”
There are several platforms to invest your money in today. The stock market is obviously always an option; however, many investors shy away from this venue due to market volatility and low rate of return. Some investors are finding decent returns lending their money out because buyers are turning to private sources of money due to standard commercial lending sources being so tight in today’s economy. However, the platform that offers one of the greatest opportunities and the highest rates of return in today’s volatile economy is investing in commercial real estate.
Many of the same people who previously invested in residential real estate are turning to buying commercial properties because they see current market conditions as creating an opportune time to make this upward transition. So what are the factors that make commercial investments stand out? Commercial real estate investments generate higher returns for several reasons:
The advantages of commercial real estate
Investing in commercial real estate allows you to generate money in several different ways. Here are some examples :
1. First, you can buy the property, build capital and then depending on your exit strategy, take your profit when selling the property.
2. If you are looking for monthly income, you have the option of renting or renting the property to earn monthly income.
3. If you run your own business from the property, you’ll save the expense of paying rent to a landlord while building your equity in the property at the same time.
4. If the commercial property you have purchased for your own business contains more space than you need for your operations, you can earn monthly income by renting or leasing the parts of the building that are not your personal use.
A secure investment
Investing in commercial real estate is a safe investment for several reasons:
– The tenants’ rent payment covers the most important expense of the property, the mortgage.
– Most commercial leases increase with the increase in the CPI (consumer price index), so any increase in your expenses is covered by the increase in rent to tenants.
– Most or all of the operating costs are paid by the tenant via NN or NNN leases.
– Tenant improvements are largely paid for by the tenant.
Take advantage of the opportunity
There is a wide range of commercial real estate available. Keep an open approach to the different options and consider all investment opportunities that seem attractive to you. Go the extra mile to find the most suitable property for yourself, and it will certainly prove to be a worthwhile investment.
Regardless of your current plans and strategies, it is strongly advised that you consider investing in commercial real estate as one of your investment options.