3 Reasons a Commercial Real Estate Investment Might Be Right For You
Real estate investment is a complex, often-evolving line of work. Shifting market trends, patterns of local development, and numerous other factors influence the real estate market, making it a unique industry in which to get involved.
But for those who master its intricacies, property investment can be an exciting and highly lucrative line of work. While many new real estate investors gravitate towards residential properties, it may be worth considering commercial real estate as a viable investment. While it might depend on your cirumcstances, below are three reasons why a commercial property investment may make sense for you.
1. Purchasing Real Estate For Your Primary Business
Many first-time commercial real estate investors are business owners, and end up purchasing the structure in which their primary business is located. A purchase of this nature may offer a number of benefits.
Owning the real estate in which your business is located gives you a high degree of control over your physical space. You can expand, renovate, or alter your layout without conferring with a landlord or property manager. You may also have greater say over neighboring tenants, ensuring you can craft a physical landscape that is best tailored to your business needs.
This last detail brings up another benefit: if you own a piece of real estate with multiple businesses, you may be able to secure lucrative income streams through neighboring commercial leases. Commercial leases, in fact, tend to be longer and more secure than residential leases, potentially ensuring added stability for your investment.
2. Work With an Investment Group
Commercial property investments are expensive, and can often be difficult for a single individual to pursue. However, they can be a great choice for an investment group, where money is pooled and there is a possibility of making a more substantial purchase. This, in turn, may offer many of the benefits listed above, simply split between several investors.
3. Collateral For a Future Loan
Commercial real estate may be expensive, but often tends to be quite valuable, particularly if it houses reliable tenants and is in an attractive region. Consequently, an owned commercial property may serve as effective collateral on a future loan, potentially allowing you to leverage one commercial property purchase into an expanding real estate business.
In short, while commercial property can have a high price tag, it is worth considering the multiple reasons why it may be an effective and valuable long-term investment.