Have you ever thought of investing in property, commercial or otherwise? Feel like you might be interested but aren’t sure what it would involve? Rest assured, there may be no time like the present to get involved in this competitive market.
Before getting into details, we need to know we’re on the same page. Commercial property basically refers to real estate that’s intended for use in a business capacity – which could mean specific buildings that house independent businesses, a patch of land intended to generate profit, or even large residential properties for rent. It’s most important to remember this: designation of a property as ‘commercial’ impacts on its financing, tax classification and the laws surrounding it.
If you’re intrigued but still on the fence, here are five reasons why you should consider taking the plunge:
- An attractive, steady stream of high income
Likely one’s top priority for getting involved in any business venture – alongside passion for your work – is, of course, assessing its potential to make you more money than you’re starting with… In the long term, if not immediately. Commercial property is one example of an investment that can offer you a high-income source, providing you’re willing to put in the effort. It has higher economic returns potential than residential property since you’ll probably be leasing to multiple businesses, and the more tenants you have, the more income you’ll receive as a result.
- Capital growth potential
Property value tends to increase over time. This is particularly good news if buying and selling on for a profit is your idea long-term. Providing you show some forward-thinking in your management of the property, you can achieve multiple aims: reducing costs, increasing profits and ultimately maximising your overall returns.
- More professional relationships
Dealing with professional tenants also means your interactions with them will in turn be more professional (in most cases) – they, like you, will know the importance of building strong relationships for a successful business. There’s less chance of encountering the kind of trouble you might get with a residential property, like a tenant who may try to delay or skip on rent, for example.
- Limited operating hours
Another stress-reducing benefit of dealing with strictly professional tenants is that they’ll typically keep standard business hours. So those inconvenient late-night complaints about being locked out of the apartment or a broken-down amenity? You can forget about them. It’s no excuse not to be proactive, of course, but means you should be able to sleep a little more soundly.
- You’re in control
Ultimately, owning your property means you can modify it as you see fit. Obviously, this might require some reasoned logic if you want to keep running a successful property that’s attractive to tenants, but there is certainly room for more freedom and creativity on your part. Typically, it’s also simpler to obtain planning permission for changing use of a commercial building as opposed to a residential property.
These are only five of many good reasons you should think about getting involved in the market for commercial properties. Note that it’s not all plain sailing; it’s demanding work and if you’re serious about it, be sure to take more time to do further research.