The Good and Bad of Commercial Real Estate Investing | Athanasios Tsiropoulos

Commercial properties are generally more profitable than residential ones, but there are also risks involved. This is why it's important to thoroughly understand the various factors that go into investing in commercial real estate.

Understanding the various factors that affect commercial real estate investment is also important in making an informed decision.

Commercial Property and What it is

Commercial property is a type of property that includes various types of buildings, such as retail shops, office buildings, and mixed-use properties. There are differences in managing these types of properties. To help you make an informed decision, let's talk about the pros and cons of investing in a commercial retail space.

Why You Should Invest 

Income Potential

One of the main reasons why people choose to invest in commercial real estate over residential rentals is the potential for higher returns. For instance, depending on the current economic climate and external factors, such as a pandemic, a commercial property can return up to 12% annually.

Professional Relationships

This type of property is usually owned by a small business owner. He or she is usually not an individual but a limited liability company (LLC). This allows the tenant and landlord to maintain a professional relationship.

The Public

The importance of having a strong relationship with a commercial tenant is evidenced by the fact that both parties have a vested interest in the success of the property. This ensures that both parties can maintain the quality of the property and improve its value.

The Bad Side of Investing 

Time Commitment 

With owning a commercial property with multiple tenants, there is more to manage than just the tenants. Aside from multiple leases, you also have to deal with various maintenance issues and public safety concerns. Compared to residential real estate, managing a commercial property can be more challenging.

Help Is Required

If you consider yourself a DIY type of person, who would like to handle the maintenance issues of a commercial property, then you need to be licensed. This will allow you to hire someone to help with the repairs and emergencies. Unfortunately, this is an additional cost, but it's necessary to maintain the property.

Before committing to investing in a commercial property, it's important to consider the expenses associated with property management. Usually, property management companies charge around 5-10% of their rent revenues for their services.

The Initial Investment

Getting into the commercial real estate market can be more challenging than renting a home. After acquiring a property, you'll be required to make large capital expenditures. For instance, if you're considering a major renovation, such as a new roof, you might need to spend thousands of dollars.

The increasing number of customers can lead to more expenses associated with maintaining a commercial property. However, if the gains are greater than the costs, then it's possible to support a larger purchase.

There is good and bad in any situation or experience in the real estate world. Finding the right fit for your personal goals is the best thing to do, which in the end, will make you the most successful.

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About Athanasios Tsiropoulos

Athanasios Tsiropoulos is a real estate expert with over two decades of experience. His father realized the American Dream by building a real estate empire with nothing but his ability and strong work ethic. Athanasios, like his father, has the same drive and dedication to succeed.

Athanasios relocated to the Dominican Republic town of Punta Cana after a successful 20-year career. Noting how the Caribbean Sea and the Atlantic Ocean created picture-perfect landscapes, Athanasios, an astute businessman, saw the island’s crystal-clear waters and more than 30 kilometers of white sandy beaches and knew it was the ideal location for his luxury rental property business, Good Times Punta Cana. In addition to managing short-term vacation rentals, he also managed single-family homes and large apartment complexes. fter working for several years learning the ins and outs of the business, Athanasios founded his own painting and home remodeling firm. He worked with numerous real estate brokers in Fairfield and Westchester County, New York, to renovate properties that were about to be put on the market.

Athanasios Tsiropoulos, who now calls Medellin, Colombia, home, enjoys spending time with nature and reaping the benefits of everything the city offers. Fishing, camping, and relaxing with his family are some of his favorite pastimes, and traveling whenever possible.

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