Commercial real estate is much different from residential real estate. There are many various things to consider, such as the location, the number of rental units inside and its profitability, commercial real estate laws, and more. There are five categories of commercial real estate: multifamily, office space, retail, industrial, and hospitality. All are very different from each other and require a decent level of understanding and research. However, they are a beneficial investment to get started in if done correctly. If you are considering adding to your investment portfolio, contact the team at Burns & Ellis REALTORS®. We are experienced in all aspects of real estate, including commercial, and can help you make the right choice and avoid any red flags.
Why You Should Invest In Commercial Real Estate
1. Passive Income
Commercial property provides passive income streams over time through rental payments from tenants who lease space in the building or storefront. This means that you don't have to actively manage the property once it's purchased, although there are still many things you'll need to do before and after purchase to ensure that your investment remains productive and profitable over time.
2. High Appreciation
Commercial property appreciates at a higher rate than residential property because of the demand for office space and retail space. This means that when you sell your commercial property, you will receive more money than if you sold your home — assuming both properties were bought at the same time. Commercial properties can earn anywhere from 6% to 12% off the purchase price annually. That’s a hefty return on investment and is often a safe way to go since it’s not as heavily affected by the market as other income sources.
3. Limited Open Hours
With residential rental properties, you are on call at all hours of the day and night. However, businesses close, so when you own a commercial property, you work when the businesses in your property work. Emergencies can happen, but you will never have to worry about weekend repairs or the tenant calling in the middle of the night because they lost their keys.
4. Build an Impressive Portfolio
Having residential properties in your portfolio is nice, but having commercial properties is impressive. Investing in stocks and bonds can be risky because they are subject to market fluctuations and economic changes that may not be within your control or ability to predict or anticipate. By investing in commercial real estate, you can diversify your portfolio with another asset class that is less volatile than stocks and bonds but still has the potential for long-term growth over time if you choose wisely when selecting properties for investment purposes.
5. Relationship Builder
When you own commercial properties, business owners and other property owners will notice you. This allows you the opportunity to build professional relationships with some of the people in the area. You never know who someone knows, so these relationships can be highly beneficial.
Contact Burns & Ellis REALTORS®
At Burns & Ellis REALTORS®, we are real estate professionals with a passion for commercial real estate. Our team of savvy brokers and agents has the knowledge and experience to help you with your next deal. From buying or selling an office building, industrial property, or retail space, we can handle any type of transaction. Buying commercial real estate is different than residential real estate. Every property is different, with its own challenges and considerations. The consequences can be dire if something is missed. Work with a real estate professional when buying or selling any commercial property. Contact Burns & Ellis REALTORS® today to learn more!