Those who would like to get into the real estate business are often wondering – is commercial real estate a good investment?
The answer will vary depending on who you ask. Whether you ask economists, businessmen, or buyers, they might have varying views.
However, the consensus is that YES, commercial real estate is a good investment.
The success of commercial real estate investments, however, will depend on several factors, such as the type of property, the country or state where it is, and what you do out of it.
What Makes Commercial Real Estate a Good Investment
The best thing about commercial real estate investment is that it is income-producing. The earning potential can be anywhere from 6% to 12%. This will depend on the location and type of the commercial property.
Compared to other business opportunities that you can pursue, another good thing about real estate is that it is a passive income opportunity. Once it is turned over to the renter, you can earn money without exerting a lot of effort. You can run other businesses or work full-time while generating returns from your real estate investments.
Capital appreciation is another thing that makes commercial real estate a good investment. Over the years, there is a high chance that the value of the property will increase. Especially in busy cities where real estate is a luxury, the earning potential will increase over time.
There is also constant demand in real estate while supply may not be always available. In large cities, for instance, more and more people are moving to pursue high-paying jobs. These cities, however, are often dense and have limited real estate properties available. If you have a commercial property in such cities, you can earn a lot.
The Hottest Markets for Commercial Real Estate
To make it a good investment, you should know the hottest cities for real estate investments in 2020. Know where to put your money and the rewards will pour!
Atlanta, Georgia is one of the best cities where you might want to invest in commercial properties. Rent is expected to increase by up to 4% until 2024, which has the highest growth compared to any other city in the United States.
Austin, Texas is another market that is expected to grow. It is the city most likely to have more people in its current population in the next five years. Apple is also set to open a huge facility in Austin, which can help ramp up the demand for commercial real estate.
Nashville, Tennessee is another domestic market worth exploring. Rising rents and the increasing number of jobs arriving in the city will present attractive opportunities for commercial real estate.
In sum, commercial real estate is a good business and a rewarding investment! If you wish to get into this market, invest in your knowledge and skills. Take a real estate investment course to know more about the basics of real estate investment and development.