Nothing can be promising like having commercial real estate assets in your investment portfolio. In fact this sector continues to provide an excellent reward to investors. You can go online and find testimonials of successful people who have invested in commercial property.
Here are some of the advantages of commercial real estate
Attracts higher returns
Residential real estate may have a relatively low risk but the fact is that it has a low return. On the other hand, commercial real estate has a higher return.
Commercial leases are generally longer as compared to commercial property leases. Usually, you’ll find residential tenancy turning over every 6 to 12 months. Commercial property tenants will stay longer particularly when they have spent their time and capital customizing the property.
Accumulate equity through leverage
The good thing about commercial real estate is that you can place debt on the property which is several times the original equity. You can therefore be able add up your assets using lesser money in magnifying your equity while pay down your loans at the same time.
Most commercial property tenants are government institutions or large corporate bodies. They are likely to rent the property for a long period and are unlikely to default on the rent.
In order to find perfect commercial real estate, there are some factors you need to consider. They include:
Just like in residential real estate, location of the property is a very important aspect. Look at the neighbored and compare it with others. Choose a location that is decent and one that will be growing with time. Click here for some of the most promising locations one can buy commercial property.
Look at the overall cost of the property. You want to buy the property at a reasonable price. When buying a particular property, ensure the rental income you will be getting is at a higher rate than the cost of financing the purchase.
It’s a good idea to find a professional agent who will assist you find good commercial property and renters. Visit this site and read more on how to find a professional commercial real estate agent.