Real estate investments are already known to be one of the best investing options for groups and individuals alike, but many people who are just starting to get into the industry have a hard time deciding if residential properties or commercial properties will provide a better return on investment. There are certainly plenty of benefits involved with both types of real estate, but here are a few reasons why the top real estate investment companies often choose to go for commercial real estate investments:
- Even though quite a few foreign investors swooped into American real estate markets after the U.S. economy collapsed in 2008, the New York Times reported back in 2013 that the national real estate market was stabilizing and turning into a buyer’s market (where the investors and property owners tend to benefit a bit more than renters) — and the same is still true today, even with so many foreign investment companies. In fact, if anything, American consumers are more determined than ever before to support American-based businesses, including commercial real estate developers and property owners.
- Perhaps one of the most important factors causing investors to choose commercial properties over residential properties is that there is significantly less stress over the long term. Quite simply, if you’re in charge of an apartment building, you’re responsible for all of the residents in each of the rooms and you’ll probably end up working long hours and dealing with minor emergencies pretty often. With commercial properties, you could still have the same amount of property and the same sized buildings, but you’ll only have to manage a handful of businesses (which are probably not all open 24/7). Many commercial real estate property owners note that they enjoy having a bit more freedom to work when they want (e.g., normal business hours).
- Last but not least, commercial properties come with many benefits such as tax write-offs, opportunities to network with other prominent investors and business owners, and the chance to get involved in community activities and build a solid professional reputation for yourself. Financially, as long as you invest in a good area, your property values are more likely to increase over time (or at least remain stable) because commercial property values tend to change much more slowly than residential property values. Investing while you’re young can ensure that you have a solid financial plan for your future.
Now we’re asking you for some help — if you’ve invested in commercial real estates, in your opinion, what’s the biggest advantage of these investments? If you’ve invested in residential properties, would you say that those investments are better than commercial properties? Be sure to share your thoughts with us in the comments section!