Buying real estate objects has long been a profitable investment. But if for a long time housing was popular, then businessmen are beginning to actively invest in commercial real estate. This segment has its own characteristics and the right approach will bring high profits.

Invest in commercial real estate

Recently, the situation in the real estate market is changing. Many appreciated the potential of commercial facilities and transfer capital from housing to this sector. Here you can expect a good income, demand and quick liquidity.
The commercial real estate sector includes buildings and premises that are leased for various business purposes. These are small shops, offices, shopping centers, and other objects. The prices of such areas are high enough, and to purchase them, most often the services of a commercial mortgage are used. The owner pays the loan from the funds he receives from tenants.
The difference between the cost of housing and commercial facilities is big. But income is also different. According to information from experts, renting premises brings 2 times more profit than renting an apartment. For investors who want to receive a consistently high percentage of real estate, this option will be optimal.
The interactions between the owner and the tenants in these segments are also different. When renting an office or a shop, the tenant himself will pay for the restoration work and equip the area as needed. With the delivery of housing, you have to do the repair yourself, update the furniture, conduct technical control of communications systems. In this case, the apartment is usually rented for a period of 12-18 months, and commercial objects for a longer period.
Despite the advantages, the owners of only 5% of the areas of this type of real estate are individuals, the rest of the shares belong to companies or property funds. This situation is observed due to the high cost of objects in the commercial segment.

One of the ways out is a mortgage, but its amount depends on the type of real estate, total area, and other factors. Therefore, it is important to estimate how much you want to take from a bank considering the planned rental income. In most cases, the first installment is 25% of the total cost. It is necessary to take into account tax expenditures in the range of 0.3-2% and the amount that must be paid when evaluating the object.
To get profit from investing in commercial real estate, it is important to minimize your expenses and choose an option when you do not need to invest a lot of money, for example, for repairs. Analyze the location of the premises, convenience for doing business and the surrounding infrastructure.