What are the benefits of investing in commercial real estate?
There was a time when Commercial Real Estate or CRE was only accessible to seasoned investors with larger portfolios. But today, with the advancement of the internet and technology there have been a large number of online marketplaces and almost anyone can become an investor in real estate and even CRE.
Commercial Real Estate or CRE is the acquisition and management of commercial properties, which includes retail buildings, office spaces, warehouses, and even certain apartments. But do you think there are any benefits in investing in commercial real estate over other investment formats? Let’s check below.
BENEFITS OF INVESTING IN COMMERCIAL REAL ESTATE
The sole reason for anyone to invest in something is the promise of getting returns or profit. If you are planning to invest in commercial real estate, you are expected to reap a lot of it. With CRE investments, you can get an ROI much faster due to the high amount in rental income. You can also raise the rents of these places compared to that of the residential structure since these are mostly for businesses. Also in commercial real estate, you can secure a long term lease contract with your tenant which ensures a guaranteed income for the next at least 5 years unaffected by any economic fluctuations.
While maintaining a commercial property can be hard and exorbitant at times, the owners can avail certain tax incentives as per the Internal Revenue Service which offers tax incentives to the owners especially on expenses required for upkeep and maintenance of the commercial properties.
Shared responsibility of maintenance:
In CRE, upkeep and maintenance are significantly cheaper on part of the owners as the tenant or leaseholders are business owners too, who share the responsibility to a certain extent. The property serves them as the face of their business and therefore they are concerned about maintaining it for the sake of their image and to ensure the premises are clean and well kept.
While residential investment has a lot of competition, investing in CRE has fewer competitors due to bigger structures offering a large variety of establishments.
Increased Value Over Time:
The value of a property in real estate appreciates over time. In commercial real estate, you can always add in a new amenity or install a new feature to upscale it. A prime location helps the tenants to thrive and opens ways for other investors to take interest in your property when you are intending to sell it in future.
Investing in commercial real estate can be one of the secured options in your investment planning. What is your trusted form of investment? Let us know in the comments.