Choosing the right investment vehicle can prove to be quite the challenge. Everyone has their own opinions about what type of investments are best and which will be the most lucrative, the easiest to manage, the least risky, etc. And, with all that handy insight and advice, how could you possibly narrow it down? Well, that starts by taking the time to explore the options yourself, learn what each offers and then decide what combination of investment vehicle and strategy works best for you.
In this blog we’ll take a brief look at commercial real estate, including what makes it a good investment and why so many people choose it.
Return On Investment (ROI)
One of the biggest benefits of commercial real estate investing is that it garners a much higher ROI, on average, than other investments, even when compared to residential real estate. When the deals are bigger, so are the returns. Just like how people are always going to need housing, people will always going to need a space for their business. Covid may have tweaked some of the rules, but it didn’t rewrite them.
Another big reason people choose to invest in CRE is because it offers the chance to expand and diversify their investment portfolio. Think about your current investments—are they all the same type of asset? If you’re limiting yourself to one type or another, you’re are both limiting the potential of your success and exposing yourself to unnecessary risks. Choosing an asset like commercial real estate can add a whole new dimension to your portfolio.
In addition to these two major benefits, there are several other advantages to consider with commercial property investing:
- Less competition than residential real estate
- Tax benefits
- Less turnover
- Plenty of opportunities
Property Types to Consider
Of course, many people hear the word “commercial” and assume that means any business property— it does, but you’re not going to want to invest in just any property. The top five types of real estate in the commercial market include:
- Multifamily housing (apartment buildings, condos, duplexes, triplexes, etc.)
- Office buildings
- Warehouses and storage facilities (industrial)
- Hospitality (hotels, motels, resorts, RV parks, etc.)
In order to choose what’s best, you’ll need to think about all the aspects of investing in each type of property, including which one makes the most sense. It helps if you can work with a trusted investing professional that can advise you on the best course of action for you and your family.
H&O Capital Funding has helped countless real estate buyers, sellers, lessees and lessors achieve their goals. Our legacy is unwavering commitment to the communities we serve. Houlihan & O’Malley Commercial Real Estate Services specializes in four distinct, yet overlapping, areas of business: Commercial Brokerage services, Private Mortgage services, Appraisal Services and Advisory services.
For more information on loans that we offer, visit our website.