A frequently asked question among investors is “What are the benefits of investing in commercial real estate compared to other investment options?”
There are various platforms for investing your money today. Obviously, the stock market is still an option; however, many investors are moving away from that spot due to market volatility and low rate of return. Some investors are finding decent returns on lending their money because buyers are turning to private sources of money because standard business loan sources are so limited in today’s economy. However, the platform that offers one of the greatest opportunities and highest rates of return in today’s volatile economy is investing in commercial real estate.
Many of the same people who previously invested in residential real estate are turning to buying commercial property because they see that current market conditions create an opportune time to make this upward transition. So what are the factors that make business investments stand out? Investments in commercial property result in higher returns for several reasons:
The benefits of commercial real estate
Investing in commercial property allows you to make money in a number of different ways. These are just some examples:
1. First, you can buy the property, build equity, and then, based on your exit strategy, take your profit by selling the property.
2. If you are looking for monthly income, you have the option to lease or rent the property for monthly cash flow.
3. If you are running your own business off the property, you will save yourself the expense of paying rent to a landlord while building your equity in the property.
4. If the commercial property you purchased for your own business contains more space than you need for your operations, you can earn a monthly income by renting or leasing the parts of the building that are not for your personal use.
A safe investment
Investing in commercial property is a safe investment for several reasons:
– The payment of the rent of the tenants covers the biggest expense of the property, the mortgage.
– Most commercial leases increase with increases in the CPI (Consumer Price Index), so any increase you have in your expenses is covered by the increase in rent to tenants.
– Most or all of the operating expenses are paid by the lessee through NN or NNN leases.
– Tenant improvements are largely paid for by the tenant.
Seizing the Opportunity
There is a wide range of commercial real estate available. Keep an open minded approach to the different options and consider all the investment opportunities that seem worthwhile. Go the extra mile to find the most suitable property for you, and it will definitely turn out to be a worthwhile investment.
Regardless of your current plans and strategies, it is highly recommended to consider investing in commercial real estate as one of your investment options.
