It is quite difficult to argue with the fact that investing in real estate is better than other opportunities but this does not mean it is easy to choose out of the various real estate investment paths one can take. In most cases people want to invest in residential properties. This definitely has its clear advantages but Pedro Martin, a highly experienced real estate developer, points out investors should take a closer look at commercial real estate.
Why Commercial Real Estate?
When you want to invest and want good gains in the long run, commercial real estate should be considered since it offers both appreciation and constant income. There were always numerous opportunities when investing in mixed-use properties and apartment buildings. However, the market does not show the great values it once did.
Rents are going down in most parts of the world. Commercial property quickly stands out as an option that should be considered as income is stable and appreciation is close to guaranteed. When good property management is present, passive income can be exactly what so many real estate investors want.
Barriers To Face When Buying Commercial Property
The big barrier when investing in commercial properties is that more founds are needed for upkeep, reserves and down payment. The investment is basically not accessible for many interested in the real estate market. However, when factoring creative financing, this is not a huge barrier to overtake.
When you manage to use creative strategies and techniques, the buyer can easily own a larger unit with just a small down payment. There are even opportunities that involve zero down payments. The only thing is that you have to buy property with positive cash flow so that mortgages can be paid, upkeep can be managed and a truly adequate return should be given.
How Can You Decide?
The bottom line is that commercial property should be considered by the real estate investor but it is important to decide what the best option is in every single case. There are cases when the commercial investment is obviously better because of how much passive income can be generated. However, if the math is not properly done, you can easily end up faced with a problem as you will not be able to pay the mortgage or deal with high maintenance costs connected with commercial properties. In such a situation, choosing residential real estate investments would be better.
At the end of the day, the decision will also be based on personal preference. There are some real estate investors that are simply better with residential investments. Others just do not know enough about commercial investments to make a very good choice. If enough research is done though, every single real estate investor can learn how to invest in commercial properties. Be sure that you consider your budget, a very good research and that you always remain honest with your current knowledge. This is how you make a very good choice in the real estate market.