Investing in commercial real estate can prove very much profitable in the long run. It will also give short term benefits in the form of rentals. The first and foremost answer from most of the investors, when they are asked about the best way to invest money, would be to invest in real estate. According to many people, the best option is to go for investing commercial real estate, because of their unique plus points. These plus points are tempting many people to invest in properties which ultimately give good results because of the increased value of the real estate.
Along with plus points, commercial real estate investing will also have few minus points, which are generally seen in every kind of investment option. One of the foremost advantages of investing in real estate property is that it provides higher returns. When anyone is investing their hard earned money in some kind of investment form, he or she will be looking for higher returns. This is exactly served by the commercial real estate property. When compared to the returns from investments made on residential properties, the returns from the investments made on the commercial properties would be many times more. There is much demand for commercial properties and it would continue to increase in future also. Every business needs suitable place to cater its customers. Commercial real estate property, when present in the right location, which is accessible to many people, will surely be considered as hot cakes. When you invest in commercial real estate, you can expect higher returns when the property is located in popular areas. When the commercial property is suitable to the business, businessmen will not hesitate to give more money in the form of rentals or lease amounts to the landlords. Landlords should ensure that the commercial property is developed in such a way to cater the businesses of different fields. Then they will have maximum chances to capitalize it. Prices of rentals or leases will be lower in residential portions when compared to the commercial properties. Hence landlords having residential portions will not be able to make high returns when compared to the investors who have invested in the commercial properties. Unique lease terms of commercial real estate property also make it tempting for the investors to invest in this kind of property. In general, the normal rental lease in commercial properties would be in the range of three to five years. That means, landlords or investors can be sure of getting higher returns for a fixed period of time.
After the completion of lease period, landlords or investors can have the option of increasing the rental lease price so as to make more profits. Most of the investors make use of these terms to increase the rental price after three to five years. In this way, they can enjoy higher returns on commercial properties. Also, when the commercial property is suitable for their business, no businessman would hesitate to pay the rental lease amount to the landlords and they would extend their lease. (credit to brian liberto)