While owning a commercial property is a great investment opportunity, it also presents a few challenges. Commercial properties often offer more financial rewards, business partnerships, and better-kept properties but there can also be a higher risk. Continue reading to learn more about the benefits and challenges of owning a commercial property!
It’s no secret that commercial real estate can be a great way to make money. They can offer regular income that may be higher than yields on dividend stocks and bonds. Likewise, the diversification of your finances protects against the volatility of the financial markets as CRE does not usually move in sync with stocks and bonds.
Having professional tenants means you’re less likely to have to worry about them failing to pay rent or damaging your property. Most small business owners take pride in their businesses and will take the extra step to protect their livelihood. Similarly, interactions are professional and courteous as landlord and tenant have more of a business-to-business customer relationship.
The Public Eye
As commercial properties are in the public eye, tenants take good care of them to ensure their business is perceived well. Storefronts are kept clean and undamaged, keeping your property in better condition.
Along with every stream of income, there are some challenges to be aware of when investing in commercial real estate.
Once you begin renting out your commercial property, you can’t be an absentee landlord and maximize your investment. You are likely dealing with multiple leases, maintenance issues, and public safety concerns. Therefore, you will have more to manage to make owning a CRE a big-time commitment.
Large Initial Investment
Purchasing a commercial property typically requires more capital upfront than a residential rental. While getting your foot in the door is more difficult, the payout, in the end, is worth it.
The Need for Professional Advice
Consulting with a professional is incredibly valuable but they do present an additional expense. The advice and guidance you receive are crucial to success in owning a commercial property. If you’re ready to begin your commercial real estate portfolio, contact us today to get started.