Commercial Properties Versus Residential Properties
As a real estate investor you will always have to decide one of two options; to either invest in commercial properties or in residential properties. So which exactly is the best choice? If you are business minded like I am then you will definitely go for commercial real estate as opposed to residential real estate. So what are my reasons?
First of all commercial real estate has the benefit of giving you bigger returns on your investment. You will be able to enjoy financial benefits in form of incomes from cash flow, equity from loan pay down (on your mortgage), and equity from appreciation (as your property appreciates in value) and tax savings. The tax savings arise due to the fact that the tax is usually charged on an amount lower than the actual income you receive.
Another great advantage of investing in commercial properties is you have more control over factors associate with renting the property since you will mostly be dealing with business tenants and the lease negotiation process will therefore be less rigid. This is in stark contrast to residential leases which are usually more carefully defined by law and you will have little control over the terms of the lease. In addition, in a commercial lease, the tenant will usually take care of their own insurance and you will enjoy a more professional working relationship with them.
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