Choosing where to make an investment can be a difficult decision for those looking to expand their knowledge and gain more financial assets. While other types of investments can provide positive financial gains, investing in commercial property is much more dependable and will more often result in larger yields. For the following reasons, potential investors should consider allocating their money toward commercial properties.

Investors Are More Likely to Receive Higher Yields

For those looking to make an investment that is both stable and capable of substantial returns, investing in commercial real estate is the perfect route to take. As compared to residential based investments:

• Yearly commercial real estate profits are about 6% to 12% of the invested amount, while residential single family real estate yields are often only 1% to 4% annually.
• The length of time a contract lasts for residential real estate properties is often shorter than that of commercial real estate properties. Lengthier leases simplify the process of anticipating potential annual yields.

 

The Financial Risk Is Much Lower for Investors

Considering that a commercial real estate property has the potential to be rented out to more than one renter, the income an investor is receiving on a monthly basis will not be completely removed if one or two tenants decide not to renew. The financial risk is much higher and impactful if an investment is made in a residential property that is being occupied by one family or an individual that has decided not to renew.  In summary, this reflects the “don’t put all your eggs in one basket” theory.

 

Professional Correspondence Is More Likely

Commercial real estate tenants are often business owners who are looking to secure a space to conduct their financial ventures. As a result, the renter and investor dynamic is similar to that of two businesses working together. The correspondence between these two parties will thus be more businesslike when compared to the connections made with residential renters. With more transparency encouraged between the renter and investor, uncertainty will be reduced as business renters are more likely to let the landlords know when financial difficulties arise. Instead of complaining about the wall paper in a rental house, a commercial tenant only calls when needed.

 

Issues Are Less Likely to Arise

Residential real estate properties are occupied 24/7 by renters. As a result of this, such properties will often experience problems more regularly as they are being lived in. On the other hand, commercial real estate properties are occupied by businesses. Businesses are rarely open for 24 hours straight. The time in between closing and reopening the next morning is a time where problems are highly unlikely to occur. Any problems that would occur during non-business hours can be thwarted through proper locking up procedures and quality alarm and security systems.

 

Let Us Manage Your Commercial Real Estate Investments

Deciding which types of properties to invest in can be a difficult process to undertake. That is why the professionals at Acquisition Consultants have dedicated themselves to providing a valuable service to investors for over 25 years. Potential and current investors will receive expert advice. Once acquired, we can manage the commercial properties and help maintain its financial viability. For more information about commercial real estate investments and how to increase their profitability, contact us at 407-373-0930.