Since ancient times, investing in real estate property gets regarded as a status symbol, wealth and indicator of family reputation. With the advancement of technology, we now have several other investment options, such as cryptocurrency, stocks, bonds, sips, and so on. These types of investments, however, come with a risk factor.
Commercial real estate investing is the safest and most rewarding way to build wealth. The top 5 reasons why commercial real estate is considered a good investment are discussed in this article.
What qualifies as commercial real estate?
Property that brings in monetary benefits or commercial benefits is termed as commercial real estate property. Commercial real estate entails major categories like retail outlets, office space, industrial warehouses, restaurants, and so much more.
What makes commercial real estate investment-worthy?
Commercial real estate properties can be a good investment opportunity regardless of having a long career in residential real estate or being oblivious to investing in real estate. But why should you invest in commercial real estate?
Here are the top 5 reasons for you to start thinking about adding it to your real estate portfolio.
Through the tides of time, one thing is for certain- real estate value increases over time. Investment in the right property yields enormous profits in future. Thus, higher monetary benefit. Holding on to a property for a longer time elevates the value of the property. Even if you plan on renting the property, you are bound to gain from the investment.
If you invest in a property that has the potential to further development in the near future, an increase in the value of the property is very likely. Even if the market may fluctuate for a while, it will regain its momentum, making it comparatively less risky than other investment channels.
Commercial real estate, compared to residential real estate, is less competitive. This factor makes it easier to find commercial real estate.
One thing beneficial about investing in commercial real estate is that professionals are using the property, thus, eliminating unwanted ruckus. Most of the time, residential property owners have the risk of lending the property to untrustworthy people, which in turn can cause inconvenience for everyone. Professionals are the key users of commercial real estate(CRE). This automatically ensures decorum within the vicinity.
Since there are many tenants on your commercial real estate property, maintenance, general upkeep, and other improvements don’t fall entirely on you(especially in the case of a triple net lease). Moreover, professionals leasing commercial property are generally interested in proper maintenance as they are representing their business to their prospective clients.
Long term commitment
Even though commercial tenants have the option to lease out property even for a shorter span (3-6 years), the leasing tenure typically falls between 10-20 years. This arrangement gives the commercial real estate owner a long-term and stable source of income.
With a plethora of benefits that commercial real estate offers, investing in it also increases responsibilities. You have to devote more time to it as you are leasing your property to not one but a group of individual businesses. You might also need professional help to handle the issues. However, everything is possible when you take the first step.