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Investing In Residential Vs. Commercial Properties - Pros And Cons



I have so many clients that are reaching out to me right now that want to get involved with investing in real estate but they are not sure where to begin. There are so many factors to consider and selecting the right property can make all the difference. I work with an amazing team of commercial realtors who know the other side of the business that are great at helping all of my referrals. Condos, duplexes, and quadruplexes make up residential real estate, while office, retail, industrial, multifamily (of five units or more), hotel, and special purpose buildings are considered commercial real estate. Investing in residential real estate is usually where most investors start because of the lower cost of entry and accessibility to so many options. Some of these properties already have qualified tenants which can also make it a turnkey investment with very little liability. Many of the costs associated with operating the property are tax deductible and also increase the value of the home over time. Another important consideration is that residential properties are more recession proof because of the availability of new renters compared to those looking to lease a commercial property. I really like commercial real estate also because they generally have long term leases, are low maintenance and have less overhead than residential. One of the most lucrative arrangements for commercial real estate is having long term tenants who can commit to a triple net lease. In a triple net lease the occupant is responsible for paying their share of the buildings property tax, insurance and maintenance. This makes a commercial building a much more hands off option for investors who do not want to be too involved with management or variables. I also partner with many great lenders who specialize in helping businesses qualify for SBA guaranteed loans and commercial loans so they can purchase great buildings and no longer have to lease a property. Have you considered investing in real estate but were not sure where to start? Reach out to me and I can help educate you on your options and learning to build equity and passive income!



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