Commercial real estate investments are highly profitable, and this is why they are widely sought after by many investors today. To become a successful player in the market, one should think like a commercial real estate professional. One needs to be aware of the latest market trends to bag the best deals. Note that commercial real estate is not valued similarly to residential property. The income you earn on commercial real estate is directly linked to the square foot area that you can use.
Eugene Bernshtam is a project manager, artist, and architect in the USA. He is a fan of music, design, and entrepreneurship. He is also interested in movies and the arts. He is currently working in a commercial real estate investment and development firm, Avalon Holdings LLC, and its affiliated entities. His company deals and focuses on apartment buildings and mixed-use properties. It also specializes in investment development, repositioning under-performing assets in real estate, development, management, and real estate consulting services.
He was born in Eastern Europe, so his second language is English. He completed his graduation from the Loyola Business School with a degree in Finance. He received series 7 and 63 certifications and started to work in an investment banking firm directly after completing college. His hobbies include traveling, weightlifting, and scuba diving.
Commercial real estate properties give you the extra cash flow.
According to him, if you ask any professional about the advantages of investing in commercial real estate, you will invite a long monologue on how such properties are a much better deal than residential real estate properties.
Commercial real estate owners love the extra cash flow; they can enjoy the advantages of economies of scale, the relatively open playing field, and the prominent market. Even the property managers who take care of commercial real estate are affordable, and the property’s value has potential payoffs in the future.
Multi-family versus single-family properties
This is where commercial real estate differs from residential properties. You witness a greater cash flow, and the math is simple for you to understand. You get more income with multi-family dwellings. For example, you get to rent for just one family in a single-family property. However, when you have a multi-family property, you can get rent from all the families, and so here, the income generated is much higher.
According to Eugene Bernshtam, at the same time, the property leases in commercial real estate are more extended than residential properties, and this again paves the way for more cash flow. If you want to earn a consistent and generous income on the commercial property you wish to invest in, keep this in mind. Moreover, if you are in a tight credit environment, make sure you enter the market with some cash in hand as commercial real estate lenders will want to see at 30% of the amount of the property’s value before they are ready to offer you a loan for further expansion or development.