Is Commercial Real Estate a Good Investment?

If you have some money to invest, it can be difficult to know what to do with it. It would be nice to have a crystal ball, so you know where your money is likely to get maximum growth but, sadly, that is not possible. There are many different assets you could invest in, so what makes one stand out from the others? Here is a guide to whether commercial real estate is a good investment.

Return

When it comes to investing your money, the most important point is the return on your investment. Commercial real estate has traditionally outperformed residential property as an investment, which makes it a great investment if you are looking to make long-term gains. Commercial real estate tends to have less volatility than the stock market, so you are less likely to lose your money in the space of a day or two. Of course, there is some volatility in every market, and it can take commercial real estate longer to bounce back if there is a drop in the market.

Access

Another important investment factor is access. Extrance’s platform allows for commercial real estate investments to be far more transparent, so you know exactly what you are getting involved in. However, it can take longer to sell commercial real estate than other assets and tends to be a more complicated procedure. This means that it is not a fantastic investment if you are looking to take your money out again quickly as you will be waiting on a property sale to take place.

Longer-Term Tenants

There is great potential for longer-term tenants in real estate. Residential renters can up and leave whenever they feel like it, but a commercial development may rely on people knowing exactly where they are, so they won’t be in a hurry to move on. Many businesses rely on passing traffic or reputation and they need to stay in the same location for a long time to build these up. Therefore, your tenant is likely to be stable as it will cost them money to up and move every few months. This means that the rent won’t be as likely to suffer from void periods.

It Is Likely to Be Looked After

Commercial real estate is a great and steady investment for your money. However, this is a long-term investment, so make sure you will be in it for the long haul before you commit yourself to buying. For a shorter-term investment, it is wise to speak to a financial advisor who can offer you short-term advice.