LEARN HOW TO INVEST IN COMMERCIAL REAL ESTATE
If done the right way, investing in commercial properties can yield significant benefits. Working with reputable commercial hard money lenders in Colorado, like Indicate Capital can help you secure the funds you need.
Types of Commercial Investment Properties
Types of commercial properties include apartment complexes, office buildings, warehouses, retail spaces, or industrial buildings. Some properties may include several types of uses. Investing in properties like these can potentially result in a high return.
Commercial Tenants
Any landlord knows that investing in property is far more complicated than just sitting back and collecting the rent. Although, most times, commercial tenants tend to be easier to work with than residential ones. For starters, the law allows far greater flexibility in drafting a commercial lease than a residential one. You have latitude in choosing the type of lease and essential terms such as lease termination, security deposits, notice periods, and any other matters of importance. Further, working with a business generally creates a more professional relationship. Businesses generally have at least the same level of investment as you do in keeping the property in excellent condition and building good relationships with neighbors.
Leases
As a commercial property owner, you may be able to use a lease that shifts most of the property’s expenses to the tenant, known as a triple-net lease. This can save you both money and hassle, as the tenant takes care of maintenance and other issues.
Higher Earnings
While specific rental income depends on numerous factors such as the location, property type, and the specific business that rents from you, returns on commercial investment properties typically exceed those on residential rentals by a substantial percentage.
Healthier Accuracy in Property Pricing
A potential investor can usually assess the value of a commercial property based on specific, objective facts. These consist of the income the current landlord receives from the property, which is an easily verifiable fact. In contrast, residential properties are often valued based on an assortment of different perceptions, which can be hard to unravel.
Appreciation
The value of any investment asset can rise or fall due to factors out of the investor’s control. While this can be true of commercial properties as well, you can also take action to minimize risks and to increase value. Raising the rent, improving the buildings, and obtaining the necessary permissions to add or change a property use are some common ways landlords can add value to commercial real estate.
Getting Financing
If you need help getting commercial real estate financing for your investment, Indicate Capital commercial property loans can provide what you need. Reach out to us online and let us know how we can help.
