Invest In Commercial Or Residential Property?
While residential real estate investing gets the most mainstream attention, commercial real estate investing is a major profit avenue in its own right. Make no mistake — both investment options can be very profitable and neither are easy. However, the best option for you depends on your personal preferences.
Here are the pros and cons of residential real estate:
PROS
-These units are generally easier and quicker to rent than commercial property.
-There are plenty of tax breaks available.
-Residential units are fairly easy to finance.
-With multi-unit housing, you can not only diversify your income to soften the blow if a tenant moves out, but you can also live on site and keep a closer eye on the property.
CONS
-With single-family property, one lost tenant is a significant blow to the monthly income.
-The lease terms are typically shorter, which means you spend a lot of time marketing and looking for new clients.
-These properties can be extremely time- and labor-intensive. Unless you hire a property manager, you are essentially “on call” for emergencies at any hour of the day or night.
Here are the pros and cons of commercial property:
PROS
-Longer leases mean more stable income.
-There are tax breaks here, too.
-Management requirements are much less demanding, and facilities are typically not open 24 hours.
Often, tenant will pay a “pro-rata” share of expenses like maintenance and upkeep or property taxes.
CONS
Downpayment requirements and interest rates tend to be higher for commercial financing.
Finding tenants can be a more difficult task.
Process of obtaining financing is much more complicated.
March 27th, 2008 at 6:25 pm
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March 27th, 2008 at 7:23 pm
[…] Investment: Commercial Or Residential Property? Chris wrote an interesting post today onHere’s a quick excerptWhile residential real estate […]
March 27th, 2008 at 7:24 pm
[…] Invest In Commercial Or Residential Property? Invest In Commercial Or Residential Property? By Hayli Morrison | March 27th, 2008 While residential real estate investing gets the most mainstream attention, commercial real estate investing is a major profit avenue in its own right. Make no mistake — both investment options can be very profitable and neither are easy. However, the best option for you depends on your personal preferences. Here are the pros and cons of residential real estate: PROS -These units are generally easier and quic […]
March 28th, 2008 at 1:33 pm
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