5 Benefits of Investing in Commercial Real Estate

When people think about Commercial Real Estate (CRE), they imagine well-seasoned investors with big portfolios snatching up any available space and renting them out to major corporations. The truth of the matter is even the most novice of investors can break into this market and will find it more profitable than they had anticipated. Thanks to online markets, anyone can become an investor in real estate, and here are five of the benefits to giving CRE a try:

1) Profit

The first reason why anyone decides to become an investor is the promise of profit. Return on commercial investments will be faster with the having rental income, and because it’s a business occupying the space the amount due can be increased higher than what it would be if it was residential. Make sure to offer any possible extra amenities to help entice potential tenants. In the retail real estate world, many owners offer rent abatement or tenant improvement allowance to entice tenants.

2) Tax Incentives

Maintaining commercial properties can be difficult, but the IRS offers several different tax incentives to help with all expenses related to maintenance and upkeep. The money you save can either be taken as profit from owning the property or could be turned right back around to improve it to keep your tenants happy.

3) Less Risk

Commercial real estate tends to be the least volatile of them all. Most owners strike five to ten year long leases to ensure Tenants remain on the property for several years or longer. This can help with financial security regardless of what the economic landscape looks like in the future.

4) Less Competition

When it comes to real estate, investing in residential property is difficult as there are tons of competition over the limited properties. With commercial properties, the field is much more open. With people feeling intimidated to give it a try, you can bet you’ll have an easier chance of landing the space you’re wanting.

5) Increased Value

For a property to truly bring about a profit, it must continue to appreciate value. Residential places are hard to accomplish this with, but not Commercial. Just adding a few new amenities or updating the existing ones, you can increase the value of your space and justify an increase in the prices you charge for its use.