PCRE having observed more than a wink of the real estate market recovery with anticipated profits on the horizon, the question becomes; do I now invest in residential or commercial properties to generate potential income?
Although there is no crystal ball; Investors are looking to reduce volatility in their portfolios and guard against inflation. Historically existing properties are more attractive during inflationary times when the costs of building materials increase. Although the timing of inflation is difficult to predict, some investors believe having the diversity in their portfolio is like saving for a rainy day.
There are many important factors you should know about investing in commercial real estate and a PURE Commercial Realtor is standing by to help guide you through the process.
Why Invest In Commercial?
- Commercial real estate is valued differently. The income that a piece of commercial real estate produces is directly related to its usable square footage. Which isn’t always the case with residential.
- Commercial real estate leases are generally much longer, creating income stability for your future.
- Commercial property helps diversify risk. For example, if you own an apartment building and you lose one of your 10 tenants, you only lose one-tenth of the income for that property, instead of the entire rent as you would if you lost a tenant in a single-family house.
- Cash flow is often greater with commercial real estate. The yield is often higher per square foot on an initial investment basis than it is in residential. If you lease or rent a multi-unit commercial property, you have more tenants to generate income than you do with a single-family dwelling.
Disclaimer: The views expressed here are solely those of the author and do not in any way represent financial or legal advice. Purchasing, selling or leasing real estate in any market sector is to be considered a possible risk.