Pros and Cons: Investing In Commercial Real Estate

By: Joshua Campbell

Pros and Cons: Investing In Commercial Real Estate

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Investing in commercial property can be a great way to make an income as well as expand your business portfolio. Commercial properties refer to retail, office, and industrial buildings. Unlike investing in other forms of real estate, commercial property does have more risks but can see greater returns over a long period of time. Before deciding to invest in a commercial property let’s examine the pros and cons.
Professional Relationships:
Running a commercial property means you will be meeting a lot of small business owners. These owners take pride in what they do and understand they need to maintain a professional relationship with you the landlord.
Public Appearance:
Marketing your available units, your company and your complex will be very important. Your signs or name will be up around your property. The public will quickly become aware of the quality of your units and the type of people you rent to. You have to ensure you are renting to quality tenants whose brand and business values align with yours.  
Limited Hours:
Unlike in residential units were landlords need to be accessible 24/7, at the end of the day, when your tenants close up shop and go home, so can you. Your day can have more fixed hours except for the odd break-in or fire alarm. To even avoid this, install a monitoring system in your rental units. The alarm company will notify the tenants and the authorities first.
More People To Manage:
As a landlord of commercial business, you will be responsible for multiple tenants at one time. You will have to manage your time between each unit and ensure the storefront and inside the business is maintained. That being said it isn’t just the tenants you need to be concerned about. With the public coming in and out of the units all day there is more chance for accidents, injuries and vandalism on the property.
Help Required:
Typically, commercial real estate is run by a company. It is hard investing in commercial real estate on your own. Therefore, you will need a team to help you run and maintain the units. For example, in residential real estate, when there is a problem you can easily attempt to fix it. In commercial real estate, you must be professionally trained to tackle large issues that arise. If you are not, you will need to constantly be outsourcing handymen to come and fix the units. This can add up fast and might require you to have a handyman on staff for all emergencies.  
Bigger Upfront Investment:
Purchasing a commercial property requires a larger upfront investment. Even after you have purchased a space you will need to have extra money available in the case of repairs or a few months of vacant spaces. With more vacant units the more money you will need to pay the difference.
There is a serious argument for the pros and cons of commercial real estate. But overall if you are the type of person who has access to a large amount of money, enjoys taking risks and is looking for long term gain, commercial might be right for you.
In order to succeed, you need to work with a real estate agent who has the same view for business as you do. You need to clearly identify what property type you are searching for, understand the market and learn type buildings are in demand. Your real estate agent will be able to help you navigate this and even be able to help you select potential tenants. For more information on how Knowledge Broker can make your investment dreams a reality click here.
At Knowledge Broker, our goal is to create an open-source of information for all our clients. We want to ensure that, at the end of the day, they get exactly what they want and what they need. If you know someone who could use our help or services please put them in touch with us or send us their details using the contact information below. And before you go, click here to take the Knowledge Broker Quiz and see exactly what we can do for you!

JOSHUA CAMPBELL (@knowledgebrkr)
Real Estate Broker
Coldwell Banker The Real Estate Centre, Brokerage
249 Avenue Road • Newmarket, ON L3Y 1N8




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