Owners of most businesses sometimes are confronted with the issue of purchasing their own space or going for rental property. Many factors have to be taken into consideration before making the last decision. You should have a clear picture of the future of your business; whether you are going to stay at the same place for a long time, you have strong financial resources, or you also want to take all those tax benefits associated with ownership of the business. All these points have to be deliberated before buying a commercial property.
Buying a commercial property can offer a number of advantages and also provides a firm foundation for your business. A few advantages of investing in a commercial property can be as follows:
- Higher Income Gains: It is seen that buying commercial property gives higher returns compared to a residential property because commercial property gains appreciation faster. If you give your commercial property on lease, you are likely to get more income. The potential for capital growth is higher as these properties are valued on the factor that the potential rent is achieved. If a number of economic activities are realized, and the surrounding area of the property is also showing good commercial activities, you are likely to get considerable capital growth.
- The steadiness of Income: Commercial properties can be leased for longer periods while residential properties are leased for shorter periods. It means that there will be a steadiness of income for many years. Longer periods also mean an increment in rent every year showing good income growth and that also means you get a higher return on your investment.
- Reliable Tenants: All of us come across shocking stories of bad tenant behavior in apartments and houses. But on the other hand, tenants of the commercial property are doing business and earning from this property. They do not try to de-fault with the owner and they know that keeping a good relationship with the owner is better for them only. Once their business is established at your property, they will not like to shift only because of their horrible behavior.
- Cash Flow prospects: If you buy a commercial property for yourself but it has some space also that can be given on lease, you get a chance to have some rental income as well. It will help you in the payment of your property purchase. It is one of the best ways to offset the investment you have made for the property. It is true that keeping a tenant has its own responsibilities, but it is just negligible seeing the cash flow.
- Less Furnishing Expenses: Every business, be it a restaurant, hotel, bank, or salon, needs to furnish the commercial spaces as per their needs. But if you are lending your commercial property to tenants, you need not furnish it, thereby making your investment a less burden on your shoulders. But if you buy residential property, then you may have to spend a lot of money to furnish the apartment before putting it for lease.
These are some of the advantages of investing in a commercial property. If you are looking for a commercial property for sale in Perth, you can contact CommercialReady, a real estate company giving you investment opportunities along with good professional advice.