In the aftermath of the real property market meltdown, people were averse to taking risks naturally, by buying the commercial and residential property. As a seasoned investor would help you, in such bearish times, there are a lot of opportunities to take advantage of. With the true estate prices hit rock bottom recently, many properties can be bought, at a fraction of the purchase price they might have earned during the boom time.
While there is a substantial amount of risk involved with buying commercial property, with proper research and wise choice, there’s income to be made. First, let me expound some of the advantages of investing in properties of the commercial kind. Commercial properties include office spaces primarily, shops, storage warehouses, industrial areas, or any other piece of real property that is leased out or used for commercial purposes. Location and space are two of the best requirements of businesses and renting a house is a much more affordable option for them, instead of buying it. This presents commercial property investors with an opportunity to make substantial profits.
One of the perfect advantages of buying commercial properties will be the long leases and high rent that owners can earn. In comparison to residential properties, commercial ones tend to maintained much more professionally, which automatically reduces expenses. The high percentage of return on investment, more than 8% to 9%, justifies commercial real estate investment. Properties in best locations can expect an annual hike of 3% to 4% in rent, which guarantees higher returns in the future.
- Taxes are “distortionary”
- China Green Holdings Limited (BVI registered company)
- Create an other asset accounts called “Investments at Cost” or “Marketable Investments”
- 3rd-party fees (like PayPal)
- When to sell …
- 1 Funds must be truthfully named
- 2003 $2,594.00 16.8% 53.5% 35.8% 96.9%
By handing on the maintenance and administration to a commercial property management firm, you can simplify your daily life and reap earnings in the long run. Commercial property that is positioned in prime business zones are always popular and hence you can expect a good resale value in the foreseeable future, when the prices in that locality substantially appreciate. You need to understand the prime need for ‘Location’, as it pertains to buying commercial real estate.
Businesses are looking for office, shop areas, warehouses with all the current necessary amenities and resources in their vicinity. So choosing a commercial space in the right location is the first important things and it requires a substantial amount of market research to find such properties. You will have to networking with realtors, who have a data source of such properties on sale. Decide on how much you are prepared to invest, that will automatically limit your alternatives and help you concentrate on the type of properties you are able to invest in. Once you’ve shortlisted a few properties, determine the price tag and the projected profits through lease, after accounting for the maintenance and taxation costs.
If you are planning of shopping for commercial property and plan to arrange for the investment corpus through a mortgage loan, do the mathematics and determine the profits you will gain in the future after maintenance costs and loan installments. If the math shows you that the investment is feasible and you are guaranteed that your principal is safe with decent returns, do it now! When you have a commercial space in a better location, there is always going to be demand from businesses and the chances of your investment being highly profitable are higher. Workout the annual maintenance charges for the house, research every part of the investment completely before going forward. Here’s me wishing you all the most effective for your commercial property investment efforts!