Commercial property investing is not for the tame of heart or spirit. It is much more expensive to get into initially, and the risk factor is exponentially higher than it is for residential real estate investing. But, with greater risk comes the potential for greater reward. When investing in commercial properties, you stand to gain a significant financial advantage.
In the days of yore, an investor who looked at commercial property was someone who already had a lot of financial worth and was looking to expand his or her portfolio. Now, other investors can get into the commercial property investment market.
To get in, you have several options. You can purchase space or the entire building from a developer during the construction phase to have a direct investment. Alternatively, you can buy some of a developer's stocks, or invest in a mutual fund that invests in either real estate directly or in the builder's stocks. Purchases of commercial space are often easier negotiations because there is not the emotional attachment that occurs with someone's home.
There any number of properties to choose from, including office space, commercial/industrial, and retail. As land becomes increasingly more scarce, the value of these properties will steadily increase. As part of your background research, you should look at the area's vacancy rates. This helps to ensure that people will be attracted to your building and its open spaces.
As with any real estate investment, look for the best locations in areas that are on the mend from the recession. In areas where supply is low but demand is high, your investment will increase far more rapidly than in an area where the opposite is true. Typically, investors in commercial real estate are more rare than those who invest in flipping houses. This means you're more likely to have your pick of the properties.
The ability to charge a higher percentage rate per square foot for rentals means you can derive a great deal of income from leases and rents. This is different than house investing which often relies on the buying and selling of the property. You gain a tax advantage, too, in terms of depreciation value and tax write-offs.
You are also able to spread out your risk of vacancy, as you have several units to rent instead of one or two homes. This means your stream of income is likely to be steadier. You also will have income from the rents of the other units to offset the cost of the few vacant ones. In contrast, a house might sit vacant for a few months until it is rented, but the mortgage on it still has to be paid. There is no other income to offset the expenses.
If you have any concerns about the terms of the contract, consult with a commercial real estate agency or real estate attorney. Always do your homework about the building. You'll want to learn about its ability to meet current code standards, particularly when it comes to earthquakes. You will also need to find out about the history of the building, and what its ability is to be structurally strong.
With all of the necessary information in hand, you'll be able to add to your portfolio with some unique properties. You'll also บ้านมือสอง กรุงเทพ be able to earn a nice income in the process.
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