The trend of investing in commercial real estate properties has grown significantly in the past few years. A lot of investors around the world are investing in commercial properties than the residential ones for various reasons. Moreover, as per the records spending in commercial real estate properties have brought the investors a significant rise in their business leading to earnings up to billions.
If investment in commercial real estate properties is done properly, even the renting option can bring about a huge sum of money. If you have not yet thought about investing in commercial real estate properties, some of the prominent reasons that will compel you to do so include the following
Better cash flow
Compared to the residential properties, commercial real estate properties have a better cash flow. This is usually because the yield per square foot is higher for commercial properties than the residential ones. Moreover, it becomes even higher if you are renting or purchasing a multi-unit property. The higher the number of tenants, the better will be the income generated.
How much can you earn?
Well, the earning potential entirely depends on the location. The annual return percentage can vary from 6-12% dependant on the purchase price. Thus, the price is much higher than the residential properties where you get a return of around 4 percent.
Is cash flow stable?
Compared to residential properties, the commercial ones have a longer term. This ensures that the cash flow will be stable for a long time.
Operates for specified hours
Each business has its specified timing. Most of the businesses are operational during the day only. Very rare businesses operate during the night. Since they operate only in specified hours, they are very safe. If you have any threat of damage, you would be aware of how to get out of the situation.
Commercial properties are huge and are often given to people in units. There are very fewer chances of you losing the entire lease schedule at one go. So, there are very fewer possibilities for you losing your source of income within a month. However, there are high probabilities of you losing one or two tenants, but you won’t lose all of them. Moreover, had it been a residential property, if the family leaves the rental property, you will lose all your income from that property.
Before investing in any real estate properties, make sure that you do thorough research about it. You can take expert advice from real estate dealers at Forum determine the best deal for you.