Pros and Cons of Commercial Real Estate
Quick View of Pros and Cons of Commercial Real Estate
One way to make an informed decision whether or not to invest in commercial Real Estate is to weight its pros and cons. To take a closer look on both sides of the coin, here are the benefits and drawbacks of buying commercial properties.
Pros
Commercial Real Estate
Higher Rents
If you are an owner of commercial properties, you can require higher rents from your tenants. Because commercial properties are ideally located and usually surrounded with other commercial businesses offering a wide range of extensive resources and services, they are more valuable compared to residential places
Appreciation
Many commercial property owners rent only to accommodate their operating expenses and at the same time to generate a fair share of the value of the property. If you are able to buy a large commercial property at the right time, and you wait around ten years, you can sell the property for an amount that is higher than your actual property. However, there is a need for the economy to work well in order to make the trick possible.
Cons
Economically Vulnerable
As said earlier, profitable commercial property depends greatly on a stable economy. Having that said, commercial properties are more prone to be volatile compared to residential properties. When the economy slows down, the commercial property owner has to look for a new tenant quickly, or he would be at a great loss.
Zoning
Commercial properties are subject to stringent zoning compared to residential properties. Say for instance, if a certain commercial property has been zoned for a specific purpose, such as manufacturing, and the owner intends to rent it to someone who has the same business, zone regulations can be a serious problem. This might end in costly expenses regarding zoning variances as well limiting the number of uses for the owner. Since zoning regulations are generally strict, commercial properties are usually affected.
With a closer look at the pros and cons of commercial properties, we can help you make the right decision. With a professional team of realtors and brokers, you can be sure we will help you with the consultancy and all the buying process of your investment property. Surely, there are lots of benefits that commercial properties have to offer, so don’t hesitate to give us a call at 877-531-1555 or click Commercial Properties Quote.
