Commercial property investing is a little more complicated than SFR investing, but the profits and the rewards are also much greater. Many people are concerned that now, during the recession, might not be a 
good time to invest in commercial property, expecting additional price drops in the commercial real estate market. However, even though we haven’t bottomed out as far as commercial property prices go, consider these interesting facts:
- Commercial properties have held their value despite the recent downturn in housing prices
- Homeowners that have been foreclosed upon are moving back to apartments and pushing vacancies down
- Office and retail property owners who are worried about the economy are more willing to sell on creative terms
- Private lenders, tired of the stock market, are looking for other places to place their funds
Not only that, but the value-add properties can be found in any market conditions, and resold at a profit a few years later (if you buy right, of course). The profit can easily be at least a million dollars, as opposed to much smaller profits on single family homes.
1. December 2009 at 1:28 PM
real property prices have dropped in Austin TX market but not by much they have been over priced for 5 years with the profit margins thin. What surprises me is the national markets in seniro housing where the large companies are going to bankruptcy when their occupancy rates fall to only 88%. Who did the under writing and what were the companies thinking. If you buy or build for a long term hold you plan on periodic market vacancies. They clearly did not and were most probably after a cash free up. Furthermore these companies, REITS, and other behemoths are the most resistant to new technology that could save them millions. Go figure. We do solar and do it cheaper and better than anyone. However the comments back from one of my REITS was what is the benefit if my tenants pay the bills. Hello anyone out there??? Let me see a 35% to 35% drop in retail sales, and you do not want to save your tenants money?? Anyway our big clients are moving it Dell, Wal-Mart etc. Go figre for the rest of the slow thinkers, they are doing more to slow the economy than the senate.
1. December 2009 at 1:32 PM
real property prices have dropped in Austin TX market but not by much they have been over priced for 5 years with the profit margins thin. What surprises me is the national markets in seniro housing where the large companies are going to bankruptcy when their occupancy rates fall to only 88%. Who did the under writing and what were the companies thinking. If you buy or build for a long term hold you plan on periodic market vacancies. They clearly did not and were most probably after a cash free up. Furthermore these companies, REITS, and other behemoths are the most resistant to new technology that could save them millions. Go figure. We do solar and do it cheaper and better than anyone. However the comments back from one of my REITS was what is the benefit if my tenants pay the bills. Hello anyone out there??? Let me see a 35% to 35% drop in retail sales, and you do not want to save your tenants money?? Clients include Dell, Wal-mart but these companies and their sluggish thinking are doing more to slow the economy than the US Senate.
1. December 2009 at 1:36 PM
I meant not Dell and Wal-Mart are slowing economy they are moving ahead but I meant to say the REITS and other companies that operate on old technology are responsible for holdomg their companies and share holders back in the 90’s mentality.