California residents who are looking to develop their portfolio and enter a new, lucrative arena of business may be considering investing in property. While residential real estate can be the first form of property investment that comes to mind, whether in the form of buying and re-selling homes or through becoming a residential landlord, commercial properties can be an excellent investment for many. Commercial buildings can bring a different kind of business that many investors prefer for its profitability and stability.
Commercial landlords, for example, are unlikely to deal with late-night emergency calls. Unlike residential tenants, commercial property tenants are usually businesses that have their own maintenance staff or contracts. Even in cases where the landlord provides repair and management services, most of these issues take place during business hours. Rather than the intimate relationship that can be part of residential rentals, commercial real estate is often characterized by highly professional relationships.
In addition, the rate of return on commercial property investments tends to be higher than that on residential properties. Commercial tenants often need to provide their own insurance and maintenance, costs that are in many cases borne by a residential landlord. In many cases, commercial leases are lengthy and reliable, unlike the quick turnover that can come with residential real estate. Commercial properties also tend to grow in value at rates that exceed the appreciation of much residential real estate, especially outside a few major urban areas. Historically, these types of properties have shown consistent and escalating value.
Commercial real estate can be a lucrative and secure investment that generates ongoing returns. An attorney can often be of service by performing due diligence on a prospective building and then preparing the purchase agreement and other documents.
