If you are looking for an alternative source of income outside of your 9-5, real estate investing is a great option to consider. No matter your level of experience or background, real estate can be a profitable side-hustle or even a principal source of income.
In this article, we will discuss what you need to know about commercial real estate investments and how you can use it to make money and achieve financial freedom.
What are commercial real estate investments?
Commercial real estate involves properties used exclusively for business or work-related activities. Unlike residential real estate, commercial properties are not living spaces. These can include:
- Retail buildings
- Office buildings
- Industrial buildings
Benefits of commercial real estate investments
High yield of income
Commercial properties have high-income potential. While single-family home properties typically earn an annual return of 1-4% of the purchase price, commercial properties earn 6-12%.
Hedge against inflation
As the economy expands, rent prices go up, but your mortgage payment stays the same. This translates to more cash flow. Unlike stocks, which are vulnerable to market fluctuations, commercial properties are secure investments.
Because of the nature of commercial properties, you will get tenants with longer lease contracts than you would with residential properties. This means you can depend on the steady cash flow rather than shuffling between tenants.
If you keep up with the property and make all the maintenance repairs needed, the property will most likely appreciate, as real estate does. You’ll have a diverse portfolio with an asset increasing in value as you profit off it.
Tips for commercial real estate investments
Research market area and demand
Before buying into a market, make you have a firm understanding of the area and current demand. Compare areas and research employment statistics, demographics, and general economic performance to see where would make the most strategic sense to invest.
Do your due diligence
Make sure commercial investing makes the most sense for you. Understand how zoning works and how to obtain permits. You will want to get your financials together and make sure you have everything you need to submit to a lender for loan approval.
Invest in your education
Real estate investing can benefit everyone, but you want to be sure you are not blindly wandering into the process. You don’t know what you don’t know, and taking the time to learn from others who have gone through this will be to your best benefit. This way, you don’t find yourself in any sticky legal situations or make any poor financial decisions that could have been avoided.
Intro to Real Estate
If you are interested in learning more about commercial real estate investments, consider our team’s real estate education courses. We know firsthand the freedom and possibilities real estate investing offers, and we want to share what we know.
Our courses are for those looking to leave their 9-5 in pursuit of something more fulfilling, no matter their prior experience or learning style. We use real-life investing scenarios to effectively equip our students with the tools they need to succeed.
If you are ready to invest in your future, start by investing in your education. Click here to contact us today.