Business is something essential for living and one of the most promising businesses is property investment. There are different types of property you can invest in, commercial property is one of the leading trends in this business. Commercial properties include all real estate property used for business activities. A building that houses a business can be called as commercial property. However, the term can also expand not only to the extent of a building but also to a land. As long as the land is used to generate profit it can be referred to as commercial property. One of the common forms is a residential rental property.
When it comes to property for commercial purpose, it means that the building has designation which involves financing, tax treatment, as well as applied law. To make you easier to view commercial property, it includes shopping center, mall, grocery store, shops, etc. When you decide to invest in commercial property, it means that you own a property which can be rented for commercial purpose like lots of people started to be interested more in this business because the profit is more promising. Commercial property aims for higher profit, especially if you invest in a property in the most ideal location.
For clear expectation, here are benefits of investing in commercial properties if you do it right :
- The return you get from investing in commercial property is more reliable than what you get from residential. Either in capital growth or income, you get better benefits if you choose this property to invest in.
- Lots of people think that investing in residential is more beneficial due to the promise of stability of income. However, this also can be earned when you invest in commercial properties. Secure income is what to be expected when you choose property investment. This is a benefit that most investors aim. This type of investment is also more secure due to the length of average contract of lease. Residential property generally last for short-term leases. Meanwhile, the average length of contract leases for commercial properties is longer. It can range between three to ten years. This is because business takes long process to reach stability. That’s why renter will rent few years to make sure their business is stable.
- Investing in commercial property allows you to hold more control over everything involving your asset. You can decide everything based on your preferences, be it the renovation, disposal or contract agreement. You can gain significant control since you are the direct owner of your asset.
- Since you have higher profit earned from the contract leases, you will gain more chances to renovate or expand your property investment. This will lead you to add more value to your investment.
- The allowance of tax benefit of commercial properties is considered generous. In fact, commercial property attracts handy building allowance as well. This is certainly what most the investors want from their property investment. Tax is usually a hassle for most investors that they don’t want to deal with.