Why Should Invest in Commercial Properties Instead of Residential Properties?

Commercial and residential real estate are very different from each other and it is important to learn about them before investing in a property.

The residential properties are available in a plenty which can be bought at a below market price and are easy to manage.

Investing in a commercial property is regarded as a tricky business but involves an opportunity to make a lot of profit.

Here are just some of the prime reasons why more property investors are choosing commercial property instead of residential.  Better tenants  Zero furnishing cost  Increased asset value  Consistent returns

Better tenants

Depending on the location of the property, normally the tenants are banks, corporate houses or retail chains.

Having such tenants is a good deal as there is never a delay in the rent collection and even maintenance problems are minimized.

When you have a quality tenant, it attracts more such tenants in the vicinity and helps to ensure best future rental yields.

Zero furnishing cost

A major advantage of investing in commercial properties over residential is that you don't have to spend money on the furnishing of the building.

Generally, the corporate houses or the retail chains wish to furnish the property as per their need and requirements.

The main cause is branding and the businesses want their outlets should be similar in appearance at all the places.

Increased asset value

In case of excellent value appreciation rates, commercial real estate investments are always way above the other types of investments.

When business flourishes in an area, then the location witnesses new developments bringing in more customers for investments.

The developments not only produce more profit from the rents but also the owners can earn a good sum from reselling the property in the future.

Consistent returns

The lease agreements for commercial property is always signed for long terms like 5 or 10 years and the owner is assured of consistent returns unlike residential property.

The lease agreement also has a clause of annual increase irrespective of the market conditions which means a more reliable source of income for the owner.

Commercial tenants often take on many of the costs like insurance and maintenance that landlords would be traditionally expected to cover in the residential market.