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| Why Invest in Commercial Property |
Investing in Real Estate has always been and still is a necessity
for anyone who wants to secure their future and can offer great returns over a
long term period. Investing in Commercial Property is often overlooked and promise
many benefits over residential property.
Different ways of Investing in Commercial Property
Direct Investment – Buying the property or a share in a property.
Investment Portfolio – Investing in a collective scheme, such as a unit trust.
Stock Market – Investing in shares through collective schemes that invest in property companies that are listed on the stock market.
Direct Investment – Buying the property or a share in a property.
Investment Portfolio – Investing in a collective scheme, such as a unit trust.
Stock Market – Investing in shares through collective schemes that invest in property companies that are listed on the stock market.
Benefits of Investing in Commercial Property
Diversifying Risk
Mr Van Biljon- Business Partners, says that investing in commercial property as a long term investment strategy offers attractive risk adjusted returns in comparison to other investment or asset classes.
Diversifying Risk
Mr Van Biljon- Business Partners, says that investing in commercial property as a long term investment strategy offers attractive risk adjusted returns in comparison to other investment or asset classes.
Multiple Earning Potential
Earn money through the Income from rental to a tenant, as well as the Capital Growth from the increase in the value of the property. This can also provide long-term security with high returns on longer rental leases.
Earn money through the Income from rental to a tenant, as well as the Capital Growth from the increase in the value of the property. This can also provide long-term security with high returns on longer rental leases.
Less Competition
Commercial properties are often overlooked and you are not competing with homeowners in the market as is often the case with residential property. You also have a greater choice of location because you can consider properties on the merits of the specific infrastructure and it doesn't matter so much where you invest.
Commercial properties are often overlooked and you are not competing with homeowners in the market as is often the case with residential property. You also have a greater choice of location because you can consider properties on the merits of the specific infrastructure and it doesn't matter so much where you invest.
Commercial Property
Appreciates Differently
Rates for commercial property sales are determined based on how revenue is generated for that particular property, whereas residential property is influenced by the value of the whole neighbourhood’s properties. Commercial property investment offers a steady growth. There is also less risk as the lease contracts tend to be longer and you mostly will have one tenant per building, thus reducing the risk associated with the investment.
Rates for commercial property sales are determined based on how revenue is generated for that particular property, whereas residential property is influenced by the value of the whole neighbourhood’s properties. Commercial property investment offers a steady growth. There is also less risk as the lease contracts tend to be longer and you mostly will have one tenant per building, thus reducing the risk associated with the investment.
Good investment for
SME’s
There seems to be a misconception among SME owners that renting premises will offer greater flexibility than ownership. The opposite is true, when long-term tenancy can’t be secured the investment you made by improving the rented premises will be lost if your lease cannot be renewed. By purchasing a commercial property wisely (with say a 30% deposit), the cash flow requirements could match the rental payments after the first two years. This means that SME owners can save up to 50% on premises costs over a 10-year period.
There seems to be a misconception among SME owners that renting premises will offer greater flexibility than ownership. The opposite is true, when long-term tenancy can’t be secured the investment you made by improving the rented premises will be lost if your lease cannot be renewed. By purchasing a commercial property wisely (with say a 30% deposit), the cash flow requirements could match the rental payments after the first two years. This means that SME owners can save up to 50% on premises costs over a 10-year period.
