Why is Commercial Property an Investors Dream?
Investing in property has always been hailed as one of the best ways to maximise your monetary returns. What we are not often told is that there is a big difference between residential property and commercial real estate. Investing in property is a good way to increase returns on your hard-earned investment, investing in the right property is a great way to increase returns. In this post, we will be taking a closer look at why investing in commercial property is such a good choice.
- Strong returns
Commercial real estate generally provides stable returns to its investors. You can expect higher returns on capital investment and also enjoy a higher rental income. The average commercial real estate investment provides higher income per square meter than its residential counterpart.
- Longer leases
One of the greatest benefits of investing in commercial real estate is the type of tenant you can expect. Commercial spaces tend to have longer leases that can run anywhere from three to thirty years. The average commercial tenant also offers a bit more security when it comes to receiving a stable rental income.
- Lower risk factors
Commercial property carries a lower risk factor than residential property which is why many investment funds choose to invest in commercial property. The lower risk factor also makes it easier to obtain finance and realise your investment dream.
- Higher returns vs. inflation results
Returns on commercial real estate tend to outperform the increases is inflation rate over time. This means that your money is actually growing faster than the speed at which prices of goods increase. Residential property seems to be a victim to inflation rate increases at times, thus investing in commercial rather than residential property makes a lot of sense.
- Possibility of expanding your portfolio
By using the leverage that fixed property provides and combining it with responsible lending you can quickly add more properties to your portfolio. Since investing in property is considered a safe investment you can increase the size of your property portfolio with peace of mind.
- Direct control of your investment
Investing in real estate gives the owner a significant amount of control over the management of their investment. Factors such as tenants, maintenance and renovations are all within the pursue of the owner. Continued investment in your property also has the advantage of giving you a higher return further down the line.
- Tax benefits
Last, but not least consider the tax benefits involved in commercial real estate. Most countries allow for big tax advantages when it comes to commercial real estate. You can expect good depreciation figures on items such as air conditioning plants and other fixtures in your building.
Investment can be a tricky game making it important to look for a good balance of safe and riskier investments. Commercial real estate forms the backbone of any good investment portfolio. Countless amounts of research have shown time and time again that property is one of the safest and simplest investments that you can make.