Commercial real estate investing has many advantages and if one lives in Canada, Toronto commercial real estate listings are on the rise so paying attention to them will lead you to much more success in the future. Read on for specific reasons this is so.
While commercial real estate may seem more difficult to get into or grasp for a newbie investor, in reality the numbers are similar to residential real estate investing however the profit margins are much higher. Why is this? Well, let’s look at some examples to demonstrate.
More Cash Flow In Commercial
Commercial real estate involves everything from residential units that consist of more than 4 units, medical or educational facilities, industrial uses, and storefronts. There are more examples of course but that was just to show you some examples of what is being described.
Now while a similarly priced residential home may fetch you $2000 in monthly rent, but with only a $200 or $300 profit after paying $1700 or $1800 in mortgage, a Toronto commercial real estate property containing 10 units, would bring you 10 times that in monthly ($200 times 10 units equals $2000). Now of course this is grossly oversimplified and there is more things to consider, one can see how the numbers are already better with commercial.
Less Risk In Commercial
One of the biggest advantages in commercial is you get to spread the risk over a few tenants instead of relying on just one. Just like the stock market, having a more diverse portfolio is better since one tenant will not hurt you as much if you have others to keep up the rest.
Easier To Manage
While it’s possible to hire professional companies for residential as well in Toronto, the increased cash flow you get from commercial real estate allows you to quickly hire a manager. Just one unit’s rent can be applied to paying off the management company, which in turn allows you to focus on getting more deals through the works.
It’s quite obvious if you’re a real estate investor and you attend local or national real estate investing events that commercial real estate investors are living the lifestyle you are trying to achieve. Knowing this, why would you consider any other strategy for the same amount of due diligence you’d have to perform in either residential or commercial? Learn more about commercial real estate and take advantage today.