The Basics of Commercial Real Estate Investing

Investing in commercial real estate can seem a bit overwhelming, particularly if you’re new to investing. Below, we’ve gathered some common questions and answers about how the process works.  

 What is commercial real estate investing? 

Commercial real estate properties typically refer to buildings in which business is conducted or multiple tenants are present. This can include retail, office, storage facilities, apartment buildings, and more.  

 Why is commercial real estate a good investment? 

 Commercial real estate can provide a lot of benefits for the investor. One important benefit is that investing in buildings with multiple tenants helps your cash flow enormously; if someone defaults, you aren’t financially derailed. In addition, commercial real estate leases provide a variety of customization options that allow you to get the best return and allow you to negotiate and build a relationship with your tenants. Finally, commercial real estate lease terms tend to be much longer, which also gives you more reliable cash flow. 

 How do I know what to invest in? 

 You’ll want to consult with an advisor to help determine whether commercial real estate is the correct investment for you. Many factors, such as cash flow, your current portfolio, the market, and location of the investment, and more mean you’ll want to enter the investment with strategy. Luckily, many financial advisors can give you good advice.  

 What are some other things I should know? 

 If you’re looking into commercial real estate investment, you should know about different kinds of leases, cash flow and profit margin, property management, common area maintenance, and much more. Consult an advisor to learn everything you need to know! Happy investing!