When you think of investing in real estate, it’s much like residential real estate that you’re considering. You want to buy a house or apartment and live in it, paying off the mortgage until you can sell it for a profit, otherwise you rent it out, earning money as a landlord.

However, while this may be the norm, that’s not where the real money is in terms of property. If you want to make more profit, you must buy commercial real estate, not residential. While it may cost more to start with, the rewards of buying commercial real estate are much higher, and you will earn more money overall. Read on to see why it is a terrific idea to invest in commercial real estate.

Fewer Owner Costs

Being a residential landlord is not about living a straightforward life and seeing your money increase every time your tenant pays your rent, particularly when you consider how that rent should cover not only your mortgage but your property taxes and any insurance you have. on the part of real estate as well. In some cases, you may even make a loss.

Commercial real estate has fewer costs related to it, and rent can typically cover those costs because you can charge more. Depending on the lease structure, you may must pay less than if you bought a residential property, and have a good commercial real estate lawyer such as Jacob A. Krupp by your side will make things easier.

Better Returns

There are certainly greater risks in commercial real estate; an empty office building will cost more than an empty apartment or even a house. But while there is bigger risk, so long as you can cover that risk, the rewards are also much greater.

When you compare typical returns From residential properties to those expected from commercial properties, you will see that commercial real estate will pay you far more. That means you can use the money to go ahead and buy more commercial properties, expanding your portfolio and minimizing future risk while dramatically increasing your income.

Longer Rent

A standard residential lease will be 12 months, and while this can be renewed yearly, as a landlord you don’t have any idea which year will be the last and when your tenant will move out, forcing you to spend time, effort, and money attempting to find a new one, temporarily receiving no income because the property is vacant.

In commercial real estate, leases tend to be longer, and ten years on commercial leases is not unusual. This is because when a business works from a certain building and address, they want to live there for their employees and customers. This means that you can depend on their income for a longer time, and meanwhile, you can ensure that, once they vacate the building, it will not be difficult to find new tenants as new businesses are being built. created all the time.