San Antonio Property Management Blog

Should You Buy Commercial or Rental?

Should You Buy Commercial or Rental?

Should you invest in commercial real estate or rental properties? 

Should you invest in a commercial building or a rental property? There are pros and cons to each option, and I want to touch on them today. 

One of the best benefits of buying a commercial property is that you can invest your money much faster. For example, if you have $2 million to invest, you can purchase one commercial property or 10 rentals. Working through 10 closings will eat up a lot of time, and afterward, you still have to find tenants to live in your properties. 

Which option is best depends on your situation. 

On top of that, finding good tenants can be difficult. People generally only stay in rentals for two or three years, so you’ll have to continually be looking for new tenants. The world of commercial real estate tends to be more professional, so transactions will usually be smoother. 

As far as return on investment goes, both options are about the same. However, rental properties tend to be a safer bet. The office and apartment markets are more volatile than the rental market, but it depends on your situation and area. 

Another pro of rental properties is that you probably won’t have to involve other investors. You may need other investors to help with your commercial purchase, but it’s much more likely you can afford a rental property. Life circumstances can change business partnerships quickly, but you won’t have to worry about that if you invest by yourself. 

If you have questions about today’s topic or anything else, please call or email me. I look forward to hearing from you! 

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