Pros and Cons of Investing in Commercial Real Estate
If you’re thinking about investing in commercial real estate, it’s a good idea to consider the pros and cons of this type of investment and how it might help you reach your particular goals. Setting up a consultation with a Fort Lauderdale commercial real estate attorney is always a good idea no matter where you are in the process.
Common commercial real estate investments include retail buildings, warehouses, office buildings, industrial buildings, apartment buildings, and multi-use buildings.
PROS
- Professionalism – With businesses as your clients, you’ll find much more professionalism in your interactions with tenants. Rent will be paid more consistently, property will be better kept, and more.
- Higher potential ROI – Commercial real estate properties often give much higher returns than residential investments.
- Flexibility – Commercial leases are more flexible for your Broward County commercial real estate lawyer to write, as there are fewer laws governing what is legal on the property and what is required of you as the landlord.
- Better working hours – Business clients are often easier to work with and won’t have after hours issues in many cases. Residential tenants often have round-the-clock emergencies like lost keys or repair requirements which can be inconvenient.
- Objective pricing – Residential properties are usually riddled with subjective pricing. It can be difficult to get a straight price on your purchase. Commercial real estate will give you objective pricing from the beginning.
CONS
- More management – While your hours might be better, you will may have more tenants to manage and legal issues to pay attention to.
- Riskier investment – In many cases, you are exposed to higher risks with commercial real estate investments. There may be more people on a particular property or parking lots where slips and falls or car accidents can happen. Your property may also have a higher risk of vandalism.
- More initial capital needed – Many commercial real estate properties will require a large amount of upfront capital. If you don’t have enough capital, you might not have the opportunity to get started in this industry right away.
These are just a few of the pros and cons of commercial real estate investing, and although it may seem a bit complicated, commercial real estate deals don’t have to be managed alone. It’s always smart to have a Ft. Lauderdale attorney for commercial real estate available for advice on your particular deal to help ensure that it’s favorable to you.
If you’re planning a commercial real estate purchase and have any questions or concerns at all, contact Schecter Law today at (954) 779-7009.
