Commercial Real Estate Investments vs. Residential Real Estate Investments

June 16, 2012 by  
Filed under Commercial Real Estate Tips

commercial investment real estate
by Gold Beach Real Estate

Commercial Real Estate Investments vs. Residential Real Estate Investments

Investments are always a good way for you to earn more in the long run. They are expensive initially, but the returns are definitely worth it. Commercial real estate investments, in particular are a fast way for you to earn income, since commercial properties, especially those in lucrative or upscale areas, get filled up with tenants quickly, who are sure to pay relatively high value rents on time. The fact that these properties you invest in are multi-units means that the returns will be much higher than, say, a rental from a residential home.

There are many types of commercial establishments you can invest in, ensuring that one matches your budget and tastes. There are office buildings, ranging from small ones to massive high rise units that can house hundreds of offices.

This is very costly, as office buildings tend to be expensive, with massive electricity, water, and maintenance costs, but the returns are also impressive, particularly if well-established and respected companies make up the bulk of the space at your building.

Retails stores are also another excellent example of the benefits of commercial real estate investments. These can range from small stores all the way to giant shopping centers that can rival the industry giants. Like offices, these are lucrative investments, especially if famous fashion chains, giant electronics firms, fast-food and exclusive restaurants, or high-end jewelry shops set up shop in your retail store. Returns can come quickly, making your investment a very successful one.

Industrial buildings, ranging from small shops to huge industrial parks, are excellent sources of returns, too. Renowned manufacturers, technological firms, and famous factories, will pay top dollar for a spot at your investment. Industrial parks gobble up space, and even smaller factories take up large lots, so the initial investment will definitely be expensive. Like most commercial ventures, though, the returns will be very quick. As these firms benefit from their stay in the industrial park, you may get perks from their stay, or charge slightly higher fees to speed up returns, yet would not make a dent on their income.

Multi-unit commercial investments have a higher income than residential units because tenants usually pay more for renting units in commercial buildings. Multiply these with the number of tenants staying at your building, and the advantages of residential investments become clear. Commercial investments also appreciate in value quicker, particularly if the occupants are respected or famous companies, or if your investment grows dramatically over a certain period.

Commercial real estate investments will always come with a risk; it may fail mostly due to lack of tenants and occupants. However, smart business savvy and common sense will take care of this. Being fair to your occupants will ensure that your investment will see quick returns, and will develop into something that many will envy.

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