Real estate does not give up the position of one of the most attractive investment options. For a long time the residential segment has been popular, but now more and more businessmen are leaving this market. They start investing in commercial real estate, which gives high income and in some cases pays off quickly enough.
Is it worth investing in commercial real estate: advantages of the segment
Commercial real estate is a building or a separate premise that is leased out for the purpose of conducting any professional activity. The owner of such an object receives income from the rent.
The market of office and commercial real estate is stable. The cost of a square meter here practically does not change. Buying this asset is a good investment decision.
Buying a commercial object has a number of nuances, and the best option is to use the services of a lawyer. He will conduct a comprehensive analysis of all documentation and contracts, eliminating any risks for the buyer.
The market of commercial real estate includes areas that are used for various types of business. They may be small stores on the first floor of a residential building, respectable boutiques in shopping centers or offices of large companies. The cost of such premises is high and its purchase often requires registration of commercial mortgage. Taking a loan, the owner covers it from the rent. If, in the case of investment in residential real estate is important to increase capital, it is necessary first to recoup the money spent.
The cost of facilities in these segments varies significantly, but this is covered by the profit earned. Revenue from commercial premises is much higher than from housing. According to experts’ estimates, the first option brings in 2 times more than the rent of an apartment or house.
Besides, both the tenants themselves and the approach to cooperation differ. A company or a store, which rents the premises, takes on all the troubles of repair, equipment and provision of work. In case of renting the apartment, the owner shall provide all this.
The term of lease of commercial real estate is usually longer, it may be concluded for 1-5 years, while the standard contract for renting an apartment is made for 12-18 months.
As statistics shows, individuals are owners of commercial premises only in 5% of cases. Most often the owners are different organizations or funds. The main role of such a position in the market is the high value of the asset.
When registering a mortgage for an object, you should pay at least 25% of the original amount. It is also necessary to take into account expenses for taxes 0,3-2% of the value and object valuation – about 15 thousand UAH.