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Residential real estate investing is a great way to get started in the industry. Upgrading from residential to commercial property makes a massive impact as you’re scaling your portfolio. Here are our top 5 reasons to invest in commercial real estate:

1. The property appreciation  can be greatly improved over residential real estate by being creative. 

Investing in rental houses has a few pitfalls. First of all, the market for  the cash flow can be too low and does not compare to the commercial properties.  Many things one can do to improve and bring value to commercial properties.  

2. Single-Family Home Rentals Don’t Provide Enough Income for Retirement

Wealth is built through commercial real estate. Many developers may have started with single family homes, but what enabled them to retire and accrue generational wealth is commercial real estate.  Residential real estate grows in line with GDP and the economy. Commercial properties have creative ways to increase value. 

3. The Ability To Elevate The Value Of The Property 

With commercial real estate, there is the ability to elevate the value by renovation, increasing efficiencies, expanding the property and reducing expenses. This allows for higher rents increasing the net operating income. With a single-family home, the value of the property doesn’t go up with these same changes. This is typically because the value of the home is determined by what other properties are selling for in your neighborhood and the overall economy. 

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.

4. Multifamily Apartments (5 Units or More) are Considered Commercial

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 the apartment business to continue to boom. These units once renovated and upgraded lend to a higher rent component which increases the NOI and the value of the property.

5. One Good Deal May Be The Start Of Building Generational Wealth

Well, how is this possible?

By making a good investment and upgrading the property and lowering the expenses, you will see how you’ve changed and made this property worth substantially more than your purchase price.

By going through this learning process, you will be on your way to be an avid investor in commercial real estate and beginning your path to building generational wealth.

The Liquidity Source is a trusted financial advisor in the commercial real estate space, if you are looking to change your strategy from residential to commercial real estate, we can provide you with a system that will guarantee your success. It may be time to reach out for your free consultation. 

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The Liquidity Source is a trusted financial advisor in the commercial real estate space, if you are looking to change your strategy from residential to commercial real estate, we can provide you with a system that will guarantee your success. It may be time to reach out for your free consultation.

GET THE SECRETS TO COMMERCIAL REAL ESTATE FINANCING EBOOK WHEN YOU BOOK YOUR FREE CONSULTATION!

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