Investing in commercial property isn’t the path for everyone, but if you’re looking for a way to achieve financial freedom more quickly, then it’s an option you’ll want to consider. Purchasing a commercial property (or multiple properties) and renting out the spaces is a straightforward way to increase your monthly cash flow. The more you can charge for the commercial space, the greater the profits will be after you deduct out your mortgage, maintenance costs, and additional expenses.
But before you decide to take on passive income investing, it’s important to do your research to make sure this is the route you want to take to reach financial freedom.
What Is Passive Investing?
When it comes to real estate, passive investing refers to putting an upfront cost into a property and having a relatively automated income stream. However, it’s important to note that while passive investing does mean you aren’t playing an active role in the business, it doesn’t mean you won’t ever have to do anything about your commercial property investment. With passive investing, you benefit financially when the commercial property is successful.
The Benefits of Investing in Commercial Property
Passive Income Real Estate
There are plenty of reasons to get involved with passive income real estate, with some of the top factors being:
- You aren’t tied to a desk – If you’re looking for a way to bring in a steady stream of income that doesn’t involve sitting at a desk from 9 am to 5 pm, then passive income investing might be the opportunity you’ve been looking for. By living off passive income, you have the means to dictate your own schedule and be your own boss. This means that you can handle your day-to-day however you see best. Want to work from a coffee shop? No problem. Want to take a spur-of-the-moment trip? You don’t have to get permission from your boss. Living off a passive real estate income makes it possible for you to do more of what you love.
- You win back time in your day – Because you aren’t tied to a strict work schedule, passive income investing makes it possible to free up your time to spend with your friends and family or taking on new side ventures. While passive income investing requires some work, it’s not something that you’re going to need to spend eight hours a day focusing on. You’ll be able to find time for things that matter without worrying about your income drying up — a major benefit of recurring income from your commercial properties each month.
- You gain a sense of stability – With retirement around the corner, you’re doing everything you can to add to your nest egg. In the standard work world, you might find yourself stressing about a project going wrong or a few clients being lost since any negative scenario might result in your company letting you go. Taking on passive income investing enables you to stop stressing about losing the ability to make ends meet or save for retirement by being let go because the ball is completely in your court. You can take on as much or as little as you want, all while feeling more stable in the process.
Achieving Financial Freedom through Investing in Commercial Property
With passive income real estate, you’ll need to decide what type of real estate you want to get involved in. While residential real estate has its advantages, commercial real estate investing is a sure way to get you on the path to financial freedom. Here are some of the benefits of commercial real estate investing:
- Higher Income – In comparison to residential real estate, commercial investing has a much higher potential income—getting you to financial freedom much more quickly. This is because commercial properties bring in a higher rent per square foot, as well as allows you to rent out the property to multiple tenants at one time. Because you have more tenants under one roof, building maintenance and repair costs can be spread across tenants. With reduced maintenance costs and higher rental income potential, you’ll have a more profitable commercial investment.
- Cash Flow – Instead of relying on a steady stream of cash flow from only the monthly rental costs, commercial properties provide many other opportunities for additional income. Whether you decide to charge tenants for conference room bookings, the fitness center, or a spot in the parking garage, there are a variety of ways to bring in steady income in addition to the monthly rent.
- Less Competitive – Because investing in commercial properties like office buildings, restaurants, and retail spaces is a much larger endeavor, it’s far less competitive than the residential real estate marketing. This means there are many more opportunities for you to take on passive real estate investing.
- Longer Leases – Having a steady income in commercial real estate is only possible if you can maintain the number of tenants you have renting space at your property. A major benefit of commercial real estate is that lease terms are typically much longer than residential leases. For home rentals, the average rental term is one year. For a commercial rental, most lease agreements average three to five years — which means you have three to five years of monthly income headed your way.
Financial freedom is a common goal of real estate investors — and it’s possible with a solid commercial real estate investment plan. Price Commercial Properties has the experience needed to guide you through your investment journey. Contact our team to learn more.