Legal Advice During Challenging Times

Potential upsides to investing in commercial property

On Behalf of | Jul 8, 2024 | Real Estate Law |

When investing in real estate, people often decide if they want to focus on commercial or residential property. Some investors will do both, of course, but it’s good to consider what will be best in your specific situation. What goals do you have? What types of property are going to get you to those goals quickly?

Although there are pros and cons on both sides, let’s take a look at some of the positive aspects of buying commercial property as an investment opportunity.

It can generate income

First of all, you’re not just flipping the property and selling it for a profit a few years in the future. If you buy a storefront, you can then rent out the spaces and charge the store owners. The commercial property can earn income the entire time that you hold it – until you sell.

Companies want specific properties

Many homeowners are just looking for houses that are within their budget. But commercial property owners are often looking for specific things, such as a certain location or amenities that the property can offer. As such, they may be more willing to pay a higher price if your property checks all of those boxes.

It can be easier to get a loan

Finally, if you’re just getting started and so you’re going to take out loans, it may be easier with commercial property. For instance, you may be able to use a non-recourse loan. This isn’t personally guaranteed. Additionally, lenders may look at the earning capacity of the property itself, meaning that they’ll be more comfortable giving you a loan if they believe that the property will generate income.

There are many things to consider when buying commercial properties. Carefully look into all of your options when determining how to proceed.