There are many ways to make money from property. You could flip homes, trade real estate-related stocks, or rent out residential properties, however, one option you may want to consider is investing in commercial property.
Commercial real estate is any property that is solely rented out to businesses – this could be industrial premises, warehousing and storage facilities, office spaces, or retail units.
While investing in commercial real estate may be considered to be high risk, there are lots of advantages. So what are the commercial property investment benefits?
Find out everything you need to know in our helpful commercial property investment guide.
Investing in Commercial Property Offers High Returns
One of the biggest motivators for owning commercial real estate is that renting it out guarantees high yields. Of course, this is dependent on you attracting and retaining long-term tenants.
During any period of vacancy, as the owner, you’ll be liable for any costs associated with the property such as electricity, security, and taxes.
Commercial Property Investment Has Tax Benefits
By investing in commercial property, you’ll be able to enjoy tax benefits. To account for depreciation, a portion of your property’s value will be deducted from your annual tax bill. This can help you significantly reduce your tax burden.
Less Tenant Turnover
In comparison to renting out residential properties, tenants will generally stay for longer. It is not uncommon for businesses to occupy the same unit for decades, minimizing the necessity to market the property.
Shared Maintenance Burdon
Often, owners of commercial property share the responsibility for the maintenance of the building with the occupants. This helps minimize the overall ongoing expense associated with owning such an asset.
Ongoing maintenance could include remodeling and decorating the premises. Because it’s in the best interest of the tenant’s business to create a good impression on their clients, they’ll often happily shoulder refurbishment costs as they arise.
Commercial Real Estate Is a Hard Asset
If you’re considering buying a commercial real estate property such as the ones listed here, you will always be able to say that you own that asset. Commercial real estate is tangible meaning it can be used as an inflation hedge.
Your Property Will Appreciate in Value
Over time, any commercial property you buy may appreciate in value. There are several factors that will affect the value of your commercial property. These include:
- The real estate market
- The state of the economy
- The condition of the property
- The location of the property
- Competitive forces
It’s always worth analyzing these factors regularly to ensure your asset continues to appreciate in value.
Start Investing Now
Investing in commercial property has some great benefits. If you’re looking for a real estate investment that will continue to deliver returns for many years to come, commercial properties can do this.
For more real estate-related articles, check out the rest of the site.