There are a lot of people who consider investing in commercial property, but there are other people who are concerned about this. If you are in two minds about investing in commercial property, you need to know what the benefits of owning this property are. These benefits could help you make up your mind about whether or not to invest.
The Potential Income
When looking at any investment, you need to consider your returns or the income you will be making. Commercial property offers a much higher return on investment in terms of income over residential property. A commercial property will be able to make a return of 6 to 12% depending on the location. This is much higher than residential property which generally offers a return of 1 to 4%.
Being In The Public Eye
When you have a commercial property, you will be renting out to retail tenants. This is a benefit that you cannot ignore because these tenants will be more invested in maintaining your property. The property is their livelihood as well so they will not want a run-down building because this will impact their bottom line.
This results in an alignment of your interests with the interests of the tenant. The property will be kept to a good standard and this will improve the value of your investment. Of course, you will also need to be responsible for some of the maintenance.
The Limited Hours Of Operation
Another benefit of commercial property is the limited hours that your tenant will be using the property. As you will rent to businesses, you will work when they are working. This means that you will not have any out of office hours calls other than emergencies such as fire alarms and break-ins. You will not have to worry about calls in the middle of the night from tenants who have lost their keys or want something repaired immediately.
More Objective Price Evaluations
When it comes to price evaluations, it is easier to determine the property price of a commercial building than a residential house. To do this, you can request the income statement for the property from the current owner and see what the price should be. If the seller is using a reliable broker, the asking price should be set based on the cap rate of income for the area. Emotions are not generally part of commercial pricing which is something that you will face with residential property pricing.
Flexibility In Lease Terms
There are fewer laws in relation to consumer protection when looking at commercial leases. This offers you greater flexibility in lease terms and you can ensure that you have a lease that works for you as well as your tenant. Of course, there are still some laws that you will need to adhere to and these could vary depending on the state that you are in.
There are many benefits to owning commercial property that you need to be aware of. This is particularly important if you are torn between investing in commercial or residential property. For further information about us visit the website at https://3cre.com/commercial-real-estate-dayton-ohio/ or contact us.