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Is commercial property a good investment?

When you are deciding if you want to invest in commercial real estate, it is a good idea to look at the negatives as well as the positives of doing so. With commercial real estate, there is a chance that you could have a high return. Like with all real estate, renting out the property could mean obtaining returns and an income immediately.

Commercial real estate isn't always a good investment, though. If you have a renter, one of the issues is that you could have them suddenly decide to move out. This immediately stops your cash flow. Aging owners can become another issue. Someone who is too old to continue in business may decide to end their tenancy. Similarly, when you are older, you may find it difficult to continue to manage your many commercial properties. That means you may have to hire a manager, which costs you money and takes away from what you earn each month.

With commercial property, you continually have to make sure your rents increase and that you have income coming in. When properties begin to age, repairs could cost you a small fortune. This is something to consider, especially if the returns on monthly rents are not high.

Of course, real estate is likely to grow in value over time, though it isn't a guarantee. It can be a good investment in the long term, so long as the property is cared for and doesn't require extensive maintenance. This is something to consider before you ever invest in commercial real estate, and it could help you determine if it's the right kind of investment for you.

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