Natalie Burnside, The Cobb Group brokered by eXp RealtyPhone: (843) 295-1178
Email: [email protected]
Email: [email protected]
Investing in real estate can be a lucrative way to generate income and learn more about the financial world. There are many choices available in both residential and commercial properties. Many prefer commercial property investment while others advise against it. With so many details, it's difficult to decide what’s best for you. Here are some of the major pros and cons of investing in commercial real estate.
Steady Income Potential - Commercial property investments usually have a steady ROI when compared to residential properties or other types of investment. According to Forbes, the average annual rate of return for commercial real estate investment over the last 20 years is 9.5%. Most investors find the returns are more steady and predictable than other types of investments.
Shared Priorities - When you invest in a retail property you’ll share some of the same goals as your tenants. Retail businesses know that the location and public image matter to the success of their business. Therefore, they are more likely to care about things like upkeep, maintenance and other factors visible to the public. This will help you maintain and even increase the value of your investment.
Real Estate Is Tangible - Unlike stocks and bonds, a commercial property is a tangible asset. This gives you the opportunity to visit a property in person to assess the details. Investing in property is investing in a limited resource. After all, there is only so much property space available. This makes commercial real estate especially attractive to investors because land will always keep value regardless of economic situations.
Larger Upfront Investment - Typically it costs more to get started in commercial real estate when compared to residential. Purchasing or investing in a commercial property not only requires more capital up front but also comes with the potential for large future expenses like maintenance and repairs. Commercial property owners have all the same maintenance expenses as residential owners, but on a much larger scale.
You Can’t Do It Alone - You will probably need to hire professional help to maintain your commercial property. Even if you’re an avid DIY expert, commercial properties can be subject to strict rules about licensing and permits for things like construction. Hiring help can add up over time and also cost a bundle in an emergency.
Risky - Commercial properties are more vulnerable to damage and other problems just by nature of being exposed to the public. The more people coming and going, the higher risk of sustaining damage, whether by accident or vandalism. This also makes you more financially vulnerable if an incident or injury occurs on your property. Everything from parking lots to stairways holds a potential risk even when you take all precautions.
Ultimately, the decision about whether commercial property investment is right for you depends on many factors. While these are some benefits and disadvantages worth considering, your own research will always provide a more accurate answer. Look into your options and consult a financial professional for any investment advice.
Originally from the midwest, Natalie and her husband Brian spent many years following his career but knew they were forever home when they made it to the Lowcountry. During vacations on Kiawah Island, they would dream of retiring to the South Carolina coast. When an opportunity presented itself to move to Bluffton much earlier than they envisioned, it was a “no brainer” and has proven to be one of their family’s best decisions. The two things Natalie loves most about the area are the community’s welcoming attitude and the always changing, but consistently breathtaking, views from the Lowcountry bridges. “It seems that everyone you meet in Bluffton and Hilton Head loves their community and genuinely wants you to fall in love with it, too…whether it’s for a week of vacation or to plant your own long-time roots.”
