Commercial real estate: The big profits

Real estate is often referred to as the safest avenue of investment. In fact, real estate investments made with proper property evaluation (and true value), can yield good returns. This is one of the reasons why some people pursue real estate investing as their full time job. Talks about real estate generally focus on residential real estate; Commercial real estate seems to be taking a backseat. However, commercial real estate is also a good choice for investing in real estate.

Commercial real estate includes many different types of property. Most people associate commercial real estate only with office complexes or factories/industrial units. However, it’s not all commercial real estate. There’s a lot more to commercial real estate. Health care centers, retail structures, and warehouses are good examples of commercial real estate. Even residential properties such as apartments (or any property consisting of more than four residential units) are considered commercial real estate. In fact, such commercial real estate is in great demand.

So is commercial real estate really profitable? Well, if it wasn’t profitable I wouldn’t be writing about commercial real estate at all. So, commercial real estate is definitely profitable. The only thing with commercial real estate is that recognizing the opportunity is a bit difficult compared to residential real estate.

But the benefits of commercial real estate can be huge (in fact, much larger than you would expect from residential real estate of the same proportion). You can take commercial real estate either for resale after appreciation or for rent to, say, a retailer. Commercial real estate developments are actually treated as early signs of residential real estate growth.

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Once you recognize the possibility of significant commercial growth in the area (whether due to tax breaks or whatever), you should start evaluating the potential appreciation of commercial real estate prices and then do so quickly (as soon as you find a good deal). And you have to really work to get a good deal. If you find that commercial real estate, e.g. land, available in large chunks that are too expensive for you to buy, you could look into forming a small group of investors (with your friends) and buying them together (and sharing the profits later).

In some cases for example when a retail boom is expected in a region, you may find it profitable to purchase a property that you can turn into a warehouse to rent out to small businesses. So commercial real estate presents many investment opportunities, you just have to seize them.

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