by Author | 11:16

If you have money to invest, many people will advise that you turn to real estate. Even though the stock market has a lot of potential for growing your money, investing in commercial real estate generally brings higher annual returns when compared to other investment opportunities. There are four primary reasons you should look at a commercial property.

Cash Flow

Compared to residential properties, commercial real estate has a much better cash flow. If you choose to lease a multi-unit commercial location, you get a much better per square foot yield. There is an average of a 6-12% return on the purchase price.

Diversified Risk

When you lease to multiple tenants, you reduce the risk of losing any expected monthly income because of a single default. Even if you lose a tenant or two, it’s better than being dependent on just a sole tenant for income.

Work Reduction

When you lease a commercial property, you often get the added benefit of only having to work when the businesses are in operations. Business hours are usually during the day, and you reduce the risk of being bothered at all hours of the day or night for a lost key or a plumbing leak. Most commercial properties can have alarm systems and security that are monitored by a third party, reducing your workload during after hours.

Predictable Relationships

Before you secure your first tenant, contract the services of a commercial real estate lawyer Long Island businessmen recommend. While the tenant-landlord relationship is often very business-like and professional, you should still have rock-solid contract terms. However, it easier navigating relationships between two businesses that two individuals.

If you are looking for a profitable investment, commercial real estate may be the key. It requires more capital up-front, but the data shows the best long-term yield.

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