A commercial property is often used to generate income, whether from capital gain or rental income. Commercial properties typically include retail buildings, office spaces, warehouses, and other industrial spaces that businesses may rent. Many people think of residential homes and properties when they think of investing in real estate. However, there are many opportunities for investment in the commercial landscape as well. As you invest in a commercial property, your equity potential can grow to be much larger. If you are thinking of investing in the near future, consider the many benefits of owning commercial real estate.
Higher Income Potential
Although commercial real estate investing comes with higher risk, it also comes with higher income potential. The buildings are often occupied by numerous tenants, including families in the case of apartment buildings, or businesses in the case of retail and office spaces. Stock dividends yield an average of 2 to 3 percent annual return, while commercial real estate investing yields between 5 and 15 percent.
Higher Equity Potential
Leveraging is the process of using borrowed capital to make an investment. This is what helps increase the equity that comes from commercial real estate. It allows you to put down a small percent of the purchase price, finance the remaining amount, and continue investing in other properties. It also provides the opportunity to benefit from a higher return on investment.
You have access to value from the land that the commercial property sits on, along with the property itself. This offers enhanced security, unlike investing in stocks, bonds, or other investments. Any improvements on the property, including infrastructure and landscaping, also increase the value and security of the investment. Commercial real estate also do not typically require many escalating needs, allowing you to streamline your needs for maintaining the property.
Commercial real estate investors are free to invest in property improvements on an ongoing basis, as long as those changes meet local and regional regulations. They can make updates and upgrades as well as raise rent, renovate, and even apply to change the zoning. This gives commercial properties the potential to see consistent value appreciation through the years.
Trust the Professionals at Clagett Enterprises for Your Realty Needs
If you’re looking for the perfect realtor for your property or a professional to assist you during your purchase of any home, you can rely on Clagett Enterprises. Clagett Enterprises is a full-service real estate company with almost 30 years of experience in the Frederick and Western Maryland area. For assistance with selling your home and getting the best possible price, contact us online or give us a call at 301-665-6009. To meet our team and see some of our beautiful homes, follow us on Facebook, Twitter, Pinterest, and Google+.