Seeing all the great investment vehicles out there, how does one actually know which is the best and most profitable one to pick? With all the research you’ve done, you’ve probably considered commercial real estate investment as a viable option. Not only is it viable, it typically offers more financial reward than investing in residential properties. Now’s the time to start looking for a commercial property for sale in New York City for your next investment. Here’s why:
Rental Collection Is More Manageable
If you’re looking to buy a commercial property for sale in Long Island, Queens, or any of the surrounding areas, one simple way to make money off of it is to charge people to occupy the property. When owning a commercial space, you have certain advantages in rental collections that you won’t find in owning a residential property.
Business owners renting space on your property are compelled to honor payment terms and are more likely to pay their rent in time and avoid any rental disputes. You’re dealing with professionals with a reputation to maintain to their customers and to you, the owner of the property. There is an inherent business-to-business customer relationship between you and the tenant, which keeps all your interactions more courteous and on a professional level.
Compare this with a tenant renting on a residential property where they are more likely to miss payment deadlines. They have very little to lose and can possibly get away without paying whatever money they owe you. This hurts your cash flow and may even put your investment in jeopardy.
Better Capital Appreciation Over Time
Commercial properties can rise in value over time if you put some effort in making improvements to it. These can range from improved security measures or even cosmetic changes. In some cases, you don’t even have to exert so much effort on improving the look of the property at all.
Most business owners fix small defects and even do their own improvements in the property that would eventually lead to increasing the property value of your commercial space. Your tenants could even go to such lengths as to establish a local area network or a PBX system on the property to aid their internal communications.
Remember, these businesses have a brand and an image to uphold to their customers. The burden of maintaining and improving the property not only lies with you, as the property owner, but also to your tenants who are looking to make their business look good as well. It’s basically a win-win situation for both the tenant and the owner of the property.
More Flexible Lease Terms at Your Disposal
For commercial real estate investors, taking advantage of the flexibility in lease terms is perhaps one of the most important tips for buying commercial property. You can choose between a short-term lease or a long-term agreement. It all depends on your needs and also what a potential tenant is looking for in a property that you own.
If you’re looking to buy a commercial property for sale in Queens, NY, you can have it leased with a tenant on a long-term basis. A long-term agreement offers more stability and helps you secure a more predictable cash flow. To make matters simpler, you can take advantage of a Triple Net lease. This basically puts all the burden of managing and paying for property taxes, building insurance, and maintenance expenses to the lessee. The only expense you’ll have to worry about is paying the mortgage.
If you want to be more involved in managing the expenses of the property, you can always opt for a Single Net or a Double Net lease. A Full Service lease, on the other hand, offers a relatively higher base rent as it covers all of the expenses that you would otherwise not handle in a net lease.
Commercial Real Estate Offers More
In a nutshell, investing in commercial real estate gives you access to more flexibility in managing the property and even more opportunities in earning money. Having the insight to know how the property will be used to generate income even before the sale would be beneficial to you.
Let’s say there’s a commercial property for sale in Brooklyn, NY, and you’re interested in buying it, you’re gonna need help from a professional to do the purchase. Contact Alex Meskouris, a real estate expert on commercial properties, to help you get a clear picture of what you want for a sound investment.