Since the real estate investor has many choices, pursuing the form of commercial real estate investment demands thought and due diligence before actively taking action.
Income property is widely diverse and some sectors require many hours of management and decisions or other sectors like triple net properties requires little to none.
But of course the cap rates are vastly different rewarding the real estate investor a higher return for the work and time invested with the property choice. The triple net property has compressed cap rates giving off lower returns with no time or effort required while shopping centers or multi tenant buildings like office or warehouse require landlord time, expense and management decisions.
What Kind Of Returs With Your Chosen Commercial Income Property?
Thus the returns are usually higher. Most younger investors like the HIGHER returns in trade with the effect, but older real estate investors desire the triple net property due to the ease of ownership.
Of course the investor can always hire a commercial real estate property manager and sacrifice about 4 to 5 percent fee based on the gross income collected each year from the tenants. Leasing fees may range from 2 percent renewals of present tenants to 5 percent of the gross collected income on the new rent collected.
Duties such as lease negotiations, normal repairs of building or parking lot or capital repairs of roof and structure go along with owning the multi tenant buildings that provide higher returns in most cases. Finding new tenants to replace older ones is also REQUIRED.
Income property or commercial real estate investment property is a very important piece of a long term strategy for passive income with appreciation and tax benefits that go side by side with stocks, commodities, bonds and CDs to keep up with future inflation and safety in retirement.
Interested in moving to the next level, and acquiring a commercial income property that will help you reach your passive income goals for 2015?
Contact Jeff Gitt at 314-757-1031 for more information, or to find out about the equity and finance options offered by Westwood.
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