To buy or not to buy?
That's the hot-button question
if you're renting your business location
People who buy commercial property are also often looking for some
extra income. Whether you’re looking for the perfect storefront
or an apartment complex to generate some extra income, commercial
real estate can be a solid investment.
Discover Commercial Real Estate
Commercial real estate is potentially any real estate other
than a single-family home. The term generally applies to office buildings,
apartment complexes, retail properties, warehouses, educational buildings,
and manufacturing facilities. Commercial real estate can
already have a business on it, like a gas station or a restaurant.
It can also be unused space, like a vacant lot or mini-mall.
Determine Your Commercial Real Estate Goals
Buying commercial real estate can be a good way to invest your money.
Most people start buying commercial real estate for one of the following
reasons: a specific business use, extra rental income, or to build
equity.
Run a business with commercial real estate
Some people buy commercial real estate with a specific use in mind.
They want to open a store, restaurant, or bar and need a place to
put it. Buying the property can provide definite benefits over renting,
including building equity (see below) and the ability to manage your
commercial real estate space without restrictions from a property
owner.
Earn extra rental income with commercial property
People who buy commercial property are also often looking for some
extra income. Whether you’re interested in buying a duplex,
an apartment complex, or a mini-mall, renting out your commercial
real estate space can be a great way to earn some extra money.
In a growing market, where real estate prices are rising, someone
else is helping you build equity. If you rent out half of your
duplex, your renters are helping you pay your mortgage and build
equity (see below). Be sure you understand all of the economics.
Build equity with commercial real estate
Equity is the value of the owner’s share in a property. When
you finance a large sale commercial real estate purchase, you’re
borrowing the money from the bank and slowly paying the bank back.
With each dollar you pay back, that much of your equity is growing.
Think of it as the ultimate piggy bank, where every dollar you
put in gives you a little more of the property. And if your commercial
real estate property appreciates, that single dollar can end up
being worth more than a dollar. As the value of your commercial
real estate property increases over time, so does your equity. |
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