What is commercial real estate and why is it a worthwhile investment? How does an investor make money on commercial properties? What’s the benefit of investing in commercial real estate rather than other forms of investing? Excellent questions. Keep reading to get a quick rundown on the answers and to gain a better understanding of how investing in commercial properties is a great way to generate revenue.
Commercial Real Estate Defined
Commercial property is everywhere. You see it in the form of apartment buildings, rental properties, offices, retail space, farmland, hotels…you get the idea. Simply put, it’s property used to generate a profit.
Why should you invest in commercial property?
Property is a hard asset that will always hold value in a capitalistic market. Another unique quality of property is that it appreciates in value over time. This is particularly true in a city where you can’t just create more land: it’s the simple principle of supply and demand. When there isn’t much property available to purchase, that which is available becomes more valuable.
It’s also wise to put a little equity into your property which will also increase its value: make improvements to your investment and you will be rewarded in the long run.
Another clear benefit of owning commercial is the regular extra flow of cash:
During the life of your ownership of the property, there are two primary ways you’ll be seeing a return on your investment. The first is what we just discussed: appreciation value in your property. The second comes in the form of renters: they rent your space and you get paid regularly. This is simple, clean, and reliable particularly when you’re selective about whom you lease to.
Why invest in commercial property instead of something like stocks?
There are many ways to invest money, but the benefit of investing in commercial property is that you’re investing in something that intrinsically holds value. Land and property investing are far more reliable than stocks since we’re talking about a scarce resource: there are always stocks available, while land is a limited commodity. And unlike stocks, you’ll be earning a reliable and steady income in the form of renters.
To jump into the commercial real estate fray, contact the experts at Applegate Commercial Properties. We’ll not only get you on your way to owning commercial property, but we can manage the property for you and you’ll get to sit back and enjoy the extra income.