Investments in residential real estate is very much a common sight as we see almost everyone seeking home loans and trying to procure a residence of their own. This is something like a very common habit that has formed with people. However, if you are already an owner of one or two residential assets, it is high time that you consider investing in commercial properties. Investment in such kind of commercial properties will definitely help you in balancing your portfolio. Only thing that is needed is to learn the nuances that are involved in the commercial real estate arena. For this, listening to commercial real estate news or reading through the news from reliable websites will definitely help.
First and foremost, you can align yourself with some news agency that has carved a niche for itself in the commercial real estate segment. Once you know the difference that exists between residential real estate investment and commercial real estate investment you will be able to decide as to which one is better than the other.
Here, we will take a sneak peek into what the differences could be between both:
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Residential real estate is considered to be different in terms of valuation when compared to commercial real estate. The income that you get through a commercial property investment is per square foot. However, it is not so when you consider residential real estate. So, there is greater scope for getting more rentals when you are investing in the commercial real estate property.
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You can set your eyes on diversification of your risk too. There are people who make investments in different sectors. There are a few too who put all their eggs in one single basket. Even the share market guru Mr. Warren Buffet warns about such kind of a behavior. He suggests diversification of one’s portfolio so that the risk component involved in the investment is mitigated. Therefore, following commercial real estate news will definitely help you in trying to balance your portfolio.
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You can expect more flow of cash when you invest in commercial real estate. The yield it gives per year and the growth it gives year on year is significantly higher when compared to the returns that one gets though a residential rental.
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The lease tenure for a commercial property is much higher when compared to the lease tenure of a residential property. So, you can be assured of a constant stream of income when you own a commercial property, and more money too at that when compared to the residential property.
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