We will be discussing the basics and pros and cons of each type of real estate investment so you can better distinguish which type of real estate investment might be best for you.
Commercial real estate is used exclusively for business-related purposes, or to provide a workplace, rather than living like residential. Some of the most common commercial real estate properties include office buildings, retail stores, multifamily properties, and industrial properties. These types of buildings can range from large multi-tenant shopping centers to single-tenant storefronts. The standard form of commercial real estate investing is where properties are purchased and then leased to tenants to conduct income-generating activities. Commercial lease rates (price to occupy a space) are typically quoted in annual rental dollars per square-foot. These leases will run from one to 10 years or more, with office and retail space typically averaging five-to-10-year leases. Investing in commercial real estate can be potentially lucrative and serve as a hedge against the volatility of the stock market and other traditional investments. Investors can make money through property appreciation when they sell, but most returns come from tenant rents.
When it comes to investing, commercial real estate has many advantages including:
The downsides to commercial properties include:
Commercial real estate can be a great investment because it’s typically stable and offers long-term returns. So, if you’re thinking of investing in commercial real estate, be sure to consider the pros and cons and find a commercial agent that can help you.
The standard form of residential real estate investing is buying, and leasing properties used for residential purposes, such as homes and Airbnb vacation rentals. This investment is best at attracting consumers looking to lease a home rather than buy or live in an apartment. Residential real estate lease rates typically are quoted as an annual sum or a monthly rent and can have a lease term from month-to-month to a year. Residential real estate may have a lower annual return than commercial real estate, but it’s also cheaper to buy at the outset.
When it comes to investing, residential real estate has many advantages including:
The downsides to residential properties include:
Residential real estate can be a great investment to investors just starting out and wanting to build a portfolio, or for seasoned investors looking to enrich their portfolio with more low-risk investment. So, if you are thinking on investing in residential real estate, be sure to consider the pros and cons and find a residential agent that can help you today!
There’s no single answer to this question – it depends on your goals, your financial situation, and many other factors. Ultimately, the best investment for you will depend on your specific situation. If you’re looking for a short-term return, residential real estate may be the better option for you. Commercial real estate offers many advantages, such as more stability and greater potential for ROI (return on investment). It ultimately comes down to what’s right for you – so don’t hesitate to speak with an experienced real estate agent about your specific situation. Before deciding, it’s important to weigh these pros and cons. So, before you make your investment, do your research and talk to an expert.
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