1. The Cashflow is More Stable
As many of you already know Residential Real Estate’s cashflow is too low and erratic, In Commercial Real Estate, the cashflow is stable and much higher than a single-family home.
2. Single-Family Home Rentals Don’t Provide Enough Income for Retirement
Owning a few residential investment properties does not go a long way, period. I have seen and met a lot of wealthy folks and most of them achieved their wealth through commercial real estate. They may have started with single family homes, but what enabled them to retire is commercial real estate. This is what I've witnessed over the last 18 years of my banking career.
3. You Can Force the Appreciation
One can force the value of commercial real estate upward by simply raising the rents and raising the net operating income. You can't do that with houses. In the residential investment real estate world, raising rents does not equate to property value going up. As a matter of fact, the value of the home is mostly determined by the sale activity in your neighborhood.
However, in commercial real estate, the value of a property is largely determined by the income generated at the property. Therefore, the higher the net operating income on your commercial property, the higher the value. So, if you're good at managing your property, raising the rents and maintaining expenses, you can increase your wealth.
4. People Need a Place to Sleep
Most of the deals at Jeganism Business Advisory Group are small, medium and large apartment buildings. It is the most popular asset today and has been since I started over 18 years ago. I don't know how much longer it's going to last, but it's good today and it probably will be good tomorrow. With millennials not wanting to buy homes and seniors moving into smaller spaces, the need for apartments is greater than ever. All these trends are causing our apartment business to continue to boom.
5. One Good Deal is All it May Take
You have heard me say it before. One good commercial deal is all it may take to give you financial freedom. Contact us today to find out if, when and how you can start the transition.