3 Reasons to Invest in Commercial Real Estate Over Residential

reasons to invest in commercial real estate

If you’ve decided to invest in real estate, you’ve made a sound choice. But when faced with the decision of whether to opt for residential or commercial property investing, some people simply aren’t sure which type of real estate would be most advantageous for them.

Although it may be more of a time commitment, commercial real estate investing can really pay off in the end. If you’re on the fence about the best choice or need a refresher course in commercial real estate investing basics, here are three reasons to invest in commercial real estate over residential properties:

  • Higher income potentialOne of the best reasons to invest in commercial real estate: the earning potential. Typically, single family home properties have an annual ROI between 1% to 4% at best. But commercial properties usually have an annual return of 6% to 12% of the initial purchase price. The return is also much higher than other investment opportunities like stocks, bonds, and commodities like gold.
  • Specific working hoursWhen you own a residential property, you could essentially be on the clock at any time. You could receive a call for an emergency or for a small issue in the middle of the night. But with commercial real estate investing, your working time will essentially be limited to the business hours of the companies that rent your properties. Aside from a true emergency, you most likely will never have to work at odd hours or be at a tenant’s beck and call.
  • Aligned interestsWhen you own a residential property, your own interests do not always line up with those of your tenants. But because commercial retailers and tenants need to keep their stores and offices looking their best in order to ensure the success of their business, they’ll share your interest in the upkeep of your property.

If you’re interested in the idea of investing in commercial real estate, contact us today. Our hard money loans for real estate investors, secured by a property with 30% to 50% equity, are structured to protect you and your assets. Get in touch to find out how we can help you make your property ownership dreams a reality.

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