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Is Commercial Real Estate A Good Investment?

admin  /   September 17, 2020

Is Commercial Real Estate A Good Investment?

When you have spare capital at your disposal and you want to confidently increase it, then it stands to reason that you would be looking for smart investment opportunities. With so many options out there, it can be difficult to know which industries are good investments and which ones are more questionable.

This guide to commercial real estate will shed some light on this particular area of investing so you can better understand where to invest your money. 

Reasons to Invest in Commercial Property

To help answer the question of whether or not commercial real estate is a good investment, you should first understand some of the reasons why many investors choose to put their money into commercial properties.

  • Increased income:

    Most commercial properties have an annual ROI price somewhere in the range of 6% and 12% depending on the area; it’s hard to argue against results like that. When you carefully research the area in which you’re buying a property, you may be able to capitalize on an especially high ROI.

  • Triple net leases:

    A huge perk of commercial properties is that the owner generally does not pay expenses like real estate taxes or building maintenance—this greatly reduces overhead costs and boosts profit. There is also more flexibility in the lease terms for commercial properties because fewer consumer protection laws govern commercial leases.

  • Capital appreciation:

    Inflation is practically a given with each passing year and rent inevitably increases with inflation. The nature of commercial properties means that the value of commercial real estate depends entirely upon rent, so if rent doubles, then so does the property value. In turn, you can almost bet that your investment will appreciate significantly over time.

  • Portfolio balance and diversity:

    Generally, commercial properties will have at least a few different tenants. This means that the property owner is not reliant upon one tenant’s rent for their income; instead, their profit stream is diversified and reliable.

  • Security:

    Commercial real estate is not a speculative market; it’s based on time-tested, consistent needs like housing, retail spaces, offices, and storage facilities. This means that there is very little risk involved in purchasing a commercial real estate property so long as you’ve done your due diligence.

So, Is Commercial Real Estate A Good Investment?

There’s no doubt that commercial real estate can be an excellent investment—particularly when you partner with the right team. Laverty Chacón’s property management team is here to assist with every step of your commercial real estate investment journey.

Our commercial property management team can assist with everything from accounting and bookkeeping services, tenant management, and lease administration to property maintenance, vendor management services, project management services, and much more.

To take the success of your commercial real estate investments to the next level, call the team of professionals at Laverty Chacón today at 916-722-0333.

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