Have you thought about investing in commercial real estate? There can be great money to be made in renting out commercial spaces that you own. You can also flip commercial spaces, but you want to have a good understanding of the market before you get started in commercial real estate. If you are a potential investor and need a good resource to help you get started on the right path, I recommend the book The Four Benefits of Commercial Real Estate Investing and You. It’s designed as a marketing tool to help would-be investment clients learn more about the commercial real estate field. It begins by spelling out the principal benefits of buying commercial property: cash flow, appreciation, tax deductions, and inflation hedge. Under each section, author Nicholas Dunlap, CPM, vice president of Dunlap Property Group, AMO, in Fullerton, Calif., explains such basic real estate terms as gross and net income and depreciation. The second section focuses on helping investors determine whether their investment goals are best suited for investing for current cash flow or future appreciation. The book is available for $10.99 from the Institute of Real Estate Management (www.irem.org).
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The rental yield for commercial property is usually 9% to 12%. In contrast, the yield for residential property is much lower at 3% to 4%.
You are right. Commercial real estate is an excellent investment vehicle that enables long-term financial stability. The problem is that most individuals without high net worth or liquidity find problems with obtaining the funds necessary to partake in large commercial projects.
Private funding is quickly overshadowing the traditional lending channels, as private funding is far more flexible and creative that traditional lending. The investor that desires to have the greatest amount of options should pursue the private lending option.