Commercial Real Estate
Commercial Real Estate Investment should be considered to be an advanced property investment strategy because it can involve a greater degree of risk, a higher capital investment and a lower borrowing capacity. As commercial real estate is normally located in a high traffic areas, the price is normally higher than residential real estate. Also, once Commercial Real Estate becomes vacant of tenants, it is normally vacant for a long time as a Commercial Tenancy draws on a smaller demand pool than a Residential Tenancy.
Residential Real Estate Investment A Smarter Option
During its infancy, a town usually develops around a shopping strip. As the town grows, shopping centre operators will come in and build shopping centres. These shopping centres will become traffic magnets and affect the shopping strip and of course, the price of the commercial real estate in that strip.
This doesn’t happen with Residential Real Estate. Residential real estate is available in smaller chunks, meaning a smaller investment is required. There is also a greater supply of residential tenants than commercial tenants and this results in higher occupancy rates.
Residential Real Estate is the smartest place to start your property investment portfolio as it represents a lower risk and requires less capital.
3 Commercial Real Estate Investment Benefits
- The value of a commercial property is normally dictated by the value of the rental return on that property. The closer Commmercial Real Estate is to high traffic areas the greater the potential for return.
- Commercial Real Estate leases can include the tenant paying all out goings including land tax, water rates and council rates
- If a Commercial Tenant does not pay the rent, you can change the locks and close their business down
