Advantages and Disadvantages of Investing in Commercial Real Estate.
Updated: Mar 16, 2020
Ray Martin of Martin Caselli Real Estates gives you insights into the advantages and disadvantages of investing in real estate in a bid to guide you towards making wise decisions.
What Is a “Commercial Property?”
Commercial properties in this context refers to any type of office, warehouse, apartment, etc. that are leased for profit. When you invest in commercial properties, you can gain large chunks of profit, sometimes up to 15% annual returns on your price of purchase. Here are some advantages of investing in commercial real estate:
Corporate organizations typically invest in real estate says Ray Martin. Therefore, this keeps interactions between tenants and landlords official. Professionalism helps maintain good standards, says Ray Martin.
Specific Hours of Operation
Because businesses work specific hours only, you only get to work during those hours stipulated as the working hours.
Because the tenant must maintain a good impression, they work in the interest of the landlord by ensuring that the property remains in its best condition at all times. This lowers the maintenance costs for the landlord on the long run, - Ray Martin of Martin Caselli Real Estates.
Flexibility in Terms of Lease
There are reliefs available to commercial lease owners as well as much fewer protection laws for consumers, unlike state laws.
Some Disadvantages to Owning Commercial property
Ray Martin also points out a few disadvantages which you must keep in mind when purchasing commercial property.
The more properties you own, the more time you have to invest in managing them. It’s a hands-on job that requires some commitment. It’s impossible to be an absentee owner with commercial property.
There are many aspects to managing properties and unless you intend to get licensed, you will need specialists to ensure your property stays in approved standards.
Bigger Initial Investment
A lot of capital is required at the onset during the process of acquiring the property. Several things must be considered including upgrades before you make your initial deposit, the validity of estate documents, to mention but a few.
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