Why commercial real estate you might inquire? Commercial real estate is a solid investment in bad and good times of the neighborhood property marketplace. The commercial real estate I am referring to is multi-unit apartment buildings. Yes, you'll become a landlord, and No you don't have to do the work by yourself. You are the owner and not the supervisor of the apartment building. The cost of managing and owning the edifice is part of your expenses and will be paid for by the rent income. If there are more units apartment buildings are considered commercial real estate. To get the numbers work you ought to consider to possess multiple little apartment buildings, or you should go for bigger buildings. This will keep the cost to income ratio at a positive cash flow. Owning rental properties is about positive income.
It is easy to reach positive cash flow, with investing in single family homes. The appreciation of the house will contribute to the positive cash flow, even if your rent income does not cover your expenses. While single family homes are appraised by the value of recent sales of similar homes in your neighborhood, commercial real estate does not care about the value appreciation of other buildings. The worth of the entire property is completely based on the rent income. To boost the value of a commercial real estate you need to discover a method to increase the rent income. The formula on how this is figured would be too much for this short post. I recorded a few very helpful novels where you can discover all the details. What's another advantage to invest in commercial property? Commercial real estate funding is completely different than financing just one family home. You're at the mercy of lenders who prefer to make sure that you're in the place to cover the house with your personal income while lending an individual family home.