If you have commercial real estate in your investment portfolio, you’re already aware of the reward it offers to investors. But if you’re toying the idea of investing in commercial real estate for some time now, then this is the right time to do so. There are several advantages to buying new commercial real estate properties. We aim to discuss them in detail in this post.
Benefits of buying new commercial real estate properties
Significant income source
Commercial real estate properties are a good source of income, which is much higher than regular stock dividend yields. Commercial properties offer high-income returns along with capital growth. Commercial properties located in the best locations are always high on demand among business owners. Most of the new commercial real estate properties are located in prominent business hubs, which means you can expect to receive high value from leasing.
The best thing about investing in new properties is they always come with some form of warranty from the builders. Although there may be variations between builders, most of them offer some basic warranties on built-in components like interiors and appliances. There is also a warranty of structures. Since everything is new, hence the cost of maintenance is significantly low. New construction real estate properties are compliant with construction codes and standards, so it would be cheaper for you to insure.
Less vacant time
New constructions mean shiny walls, bright interiors, attractive exteriors in short, you won’t need much time to find tenants or more extended vacant periods. On the other hand, new commercial real estate properties mean more extended lease contracts with tenants that offer more extended cash flow stability.
Some of the Best Commercial properties coming up in fast-growing economic hubs have the likelihood of more immediate appreciation. This means that you can lease out your stuff quickly, and even if you decide to sell it 10-15 years down the line, it wouldn’t be a big problem for you if you have maintained the property well. Remember, it is a distinct asset class that offers a balanced investment portfolio.
Attractive leasing rates
The most significant advantage of commercial real estate is attractive leasing rates. If you’re planning to invest in areas where new construction is limited by land or law, you can expect impressive returns and cash flow stability.
Accumulate equity through leverage
When you invest in new commercial real estate, it gives you the ability to place debt on an asset bigger than the original equity. Hence, you are better positioned to invest and accumulate more assets; even your cash fund is less. In other words, investing in new commercial real estate allows you to magnify your equity.
If you invest in new commercial real estate properties, you get several tax benefits. For example, if you pay $4000 as interest you will accrue $48000 of tax-deductible interest over the course of the year.
Looking for commercial properties for sale in Corpus Christi? Here are some points for you to consider:
1. Keep the location in mind :If you are into real estate, you already know its importance. Check out the site. Is it a fast-growing area? How good is it as a commercial hub? Remember, your properties will be leased by small business owners who would like to lease a workspace where they can expect a good footfall of customers.
2. Ability to remodel:If you opt for pre-construction properties, you can get it remodeled inside and outside according to your need. For example, suppose you plan to lease it out for an office space or a call center. In that case, you can have small partitions made inside, or if you are planning to lease out for showrooms that require large undivided space, you can get the internal walls removed as necessary.
3. Less risk:Investing in commercial real estate is always less risky than residential properties or stocks. real estate’s always do well even when the market is volatile. That’s mostly because the lease is for long terms for at least ten years.
4. Study the market dynamics:Study and analyze the market dynamics before deciding which market you want to invest in. For example, in the post COVID era, co-working spaces might not be a very lucrative market. In contrast, retail can be an attractive market, given the rising popularity of the e-commerce market. Determine the consumer demands to help you make an informed decision.
Investing in real estate requires many careful considerations and market study before you arrive at a decision. Read more about the pros and cons of investing in commercial real estate here.