Too often investors are one-dimensional in their approach to real estate investing. While these investors are light years ahead of individuals who take no action, these investors are still potentially limiting their success. One-dimensional investors also potentially limit their personal satisfaction by not exploring additional areas of real estate investing. You should never let the fear of the unknown, or a lack of confidence in your own ability, prevent you from exploring new areas of financial investment.
Commercial real estate is one area of real estate investing that is often overlooked. Many individuals bypass even investigating commercial real estate, simply because the topic intimidates them. This is unfortunate because commercial real estate can be a tremendous source of cash flow a primary reason many investors get involved with real estate in the first place. Many who have braved the world of commercial real estate have found they are able to generate more cash flow and wealth through commercial real estate then through any other real estate strategy, and that commercial real estate t is actually fairly straightforward and easy to learn.
Never limit yourself because of a lack of knowledge, or fear that an area of investing is too big for you. By learning the basics of commercial real estate, you can determine if this is an area that interests you, and one that might work for you.
Reasons People Invest in Commercial Real Estate
Perhaps the number one reason that people invest in commercial real estate is the wealth building opportunities it provides. One deal completed in commercial real estate as a general rule is more likely to produce cash flow than one deal completed in residential real estate. In addition, there is a level of cash flow protection that commercial real estate offers that residential real estate does not. If you buy a residential single-family home, then you are dependent on renting out that unit to produce cash flow. In commercial real estate particularly when multiple units are involved you can have one or two units unoccupied, and still generate levels of cash flow. You also have the added benefit of having longer leases with certain types of commercial property.
Aside from financial considerations, many individuals choose commercial real estate because of lifestyle considerations. The central nature of commercial real estate means that if you own a commercial real estate property, you can deal with all prospective and current tenant issues at a single location.