It was not that long ago that commercial real estate was only accessible to the more seasoned investors; the people who had massive portfolios and were able to easily crack that particular market. However, with the rise of technology and internet advances in online marketplaces, even beginners have the opportunity to get in on the commercial real estate investing action.
Though commercial real estate in Tucson is not exactly 100% immune to economic changes, such as things like inflation, it is much less affected than residential in the grand scheme. That, along with the reality that most commercial real estate properties are privately owned, all make for the perfect stabilized foundation for investing, stemming a wonderful creation of financial success benefits that you could be experiencing as well.
Attractive Leasing Rates
One of the more notable advantages is the attractive leasing rates. In locations that have either land or law restrictions for new construction, commercial real estate can still provide appreciable returns and hefty monthly cash flows.
Cash Flow Stability
Remember the stability feature mentioned above? A lot of that has to do with the benefit of extended leasing contracts with the tenants. This longer lease duration allows commercial real estate to hold an advanced cash flow in a more stable, consistent period. In addition, the more tenants that the building has, the less risk of income loss for you.
Security Advantage
Unlike bonds, stocks, and other forms of investment, commercial real estate holds value in both the land and its improvements, such as infrastructure and landscaping. This, in conjunction with the fact that these properties are generally stable, make security more enticing for investors.
Superior Hedge Against Inflation
Investing in commercial real estate has the highest correlation to inflation in comparison to other asset classes, like corporate bonds and treasuries. This means that when inflation does occur, the price of real estate, typically properties with multi-tenant assets, will suffer. As a result, this can cause a greater demand for commercial properties and allow the owners to increase rents to offset the inflated costs.
Less Competition
One of the major disadvantages when it comes to investing in residential properties is that it comes with a lot of competition. But with commercial properties, the more prominent structures can make for less competition as a whole within that market. They can also offer much more variety of establishments as well over what residential can do.
Conclusion – Excellent Investment Option
In today’s day and age, you don’t have to be an expert investor anymore in order to win at the commercial real estate investment game. And with revenue being at the heart of all investment ventures, commercial real estate is one of the more opportunity-driven avenues to take on to earn a substantial passive income down the line. The reason for this is because commercial investing has proven time and time again to be a successful investment option.
Sure, it does take some thought, predictions, and some risk, but the path is much clearer than it was in the past, and the route to get started is more straightforward than ever before. Overall, as long as you base your investment on both potential yield and historical performance, you should be able to access the key benefits listed above, and finally feel what it is like to earn more capital and watch your money work for you.
