Property of all types have the potential to be a good investment opportunity. For those who are seeking the most financial reward as possible investing in commercial real estate tends to be the best option. However, it is important to keep in mind that there are also often more risks associated with this type of investment when compared with residential options. If you want to buy a rental property in Dallas for commercial use, you should make sure you understand both the benefits and the risks to this type of investing.
What Is a Commercial Property?
The term commercial property is an umbrella term, under which you will find many different types of buildings in which you can invest. For example, some of the most common types of commercial property includes retail buildings, office buildings, warehouses, and industrial buildings.
However, the term encompasses much more than that. It will also include apartment buildings, as well as mixed use buildings that have office or retail space, along with an apartment or condominium. Medical real estate would fall into this category, too.
One of the important things that you will need to remember when you are investing in commercial real estate in Dallas is that different types of commercial properties will have different management needs. A medical facility, for example, will likely have different needs from an apartment complex or a retail store. To make things easier on yourself, you will want to consider using a property management company that has experience with the type of commercial property you are going to buy.
What Are the Benefits?
First, consider some of the benefits that can come from investing in a commercial property. Naturally, one of the first things that will come to mind is the potential for income. When compared with residential properties, you will find that the annual return from the purchase tends to be around 6% to 12% with the commercial properties compared with about 1% to 4% with residential properties. Of course, a range of factors will affect the profit, such as the location.
Another one of the benefits of investing in commercial property that is not often mentioned is the fact that the tenants tend to do a good job of keeping up the property. They are likely running some kind of business from that property, and they need to keep it in good condition to keep their own customers and clients happy.
The hours of operation for most commercial properties are going to be very similar to the hours that you work. They go home at the end of the day, which means you are not as likely to get a call in the middle of the night because there is a problem at the property. In addition, most investors will hire property management companies to handle problems if they were to occur.
Investors will also find that there is far more objectivity in the price with commercial real estate. When buying residential real estate in Dallas, or any area for that matter, there is always the danger of having a seller who is emotionally attached to the property. They keep their prices high, and it is difficult to talk them down. This is not generally a problem with commercial real estate.
What Are the Risks?
Of course, there are also risks with investing in commercial real estate in Dallas. Unless you are hiring a property management company, you will find that there tends to be more of a time investment when it comes to dealing with the leases and the management of these types of properties. In addition, you will need to have professionals on hand to deal with maintenance issues. Commercial real estate is also a larger initial investment.
Despite the potential risks, most investors agree that there is a lot to be gained from commercial investing. It could be something you want to consider.