3. Long-term leases
The commercial property attracts long-term tenants. Most of the tenants are building their bases, and the business location is one of the key factors in business success. Tenants in commercial premises can only move if they have outgrown the space or they have secured their own premises. The tenants can stay in your property for decades.
This is unlike apartments and houses. Investors in residential houses can tell you that only a small percentage of tenants can stay in one house for a decade. Most of the people have reasons to move to spacious houses or better environment. By moving they nothing much to lose. Therefore, their tastes and comfort are determined their decisions.
As an investor, you will realize that you investing in commercial property is the best decision you can make. When the leasable spaces are fully occupied, you are assured of the constant flow of money. You don’t have to worry about advertising for spaces every now and then.
- Commercial property has minimal running costs.
Commercial property landlords are protected from in incurring repairs costs by law. Once they sign a contract with a tenant, the tenant is expected to meet all the repair costs of the rented unit. In case the tenant wants to vacate, he has to repair the house back to the state it was before. Otherwise, the tenant pays the landlord to repair the unit back to how it was before.
You need to be aware of the shortcomings of commercial property investments. While the income is attractive, the initial cost of acquiring a commercial property can be a deterrent to a willing investor. Additionally, commercial investment can be a successful investment with 100 percent returns. On the other hand, you can make huge losses in commercial property. When your property has vacant units, you have to pay council rates. This can be costly especially when the property stays long without tenants.
However, when you are able to address the above shortcomings, commercial property is the best investment to can have. If the property is strategically located, you can easily get a mortgage. Also, in the case of low occupancy, you can add value to the property to attract serious tenants. Advertisements are also good especially when you have well-furnished units.