Investment Properties: Are They Better To Sell Or Rent?
Investment properties come in all flavors. From office space to high rise hotels, single family homes, apartments complexes, shopping centers, hospitals, and many more. However, people get into the commercial real estate market for different reasons, and the age old question arises: Is it better to sell investment properties, or rent them?
Renting Out Investment Properties
Purchasing investment properties to rent is perhaps the easiest way for people to transition into a full time career in commercial real estate. Buying a duplex or store front and then renting it to tenants for business owners produces a regular stream of income. For those just starting out in commercial real estate, this extra revenue can go toward acquiring more investment properties, thereby doubling and tripling the revenue, and so on. The more properties or units which are generating revenue on a monthly basis, the less of a strain there is on cash flow when vacancies occur. Renting is a great way to ensure long-term revenue.
Selling Investment Properties
Selling real estate offers a large increase in revenue, as with fix and flip projects or selling off property after a merger or buyout. These things add hundreds of thousands, if not millions, to cash flow. Selling commercial real estate generates a large amount of revenue in a short period of time. A good portion of the revenue can be placed in the bank, while the remainder goes toward the next “buy and sell” project. By analyzing local commercial real estate markets and purchasing investment properties to sell, an investor or property developer can propel themselves into an extremely lucrative career.
Why Not Both?
Investing in commercial properties does not mean you have to sell or rent. Both types of investment properties can take time to find qualified buyers or renters. Most situations allow for a compromise. In those situations where finding a buyer is exceeding the window to generate adequate revenue, the properties can be rented. Renting commercial properties until such time as a buyer appears is a very reasonable strategy, provided tenants are made aware ahead of time that a buyer might end any leasing agreements. Similarly, leasing commercial real estate may attract buyers, which can provide a large sum and take the burden of property management off your hands.
Financing Investment Properties
Whether you are buying your first investment property, or are building a large project from the ground up, BG Capital Funding Group can help. We offer a wide range of affordable and accessible financing solutions for investment properties. Contact our offices today to learn more.