Real estate is always a great avenue to invest due to its constant good returns. Whether you have a residential property or a commercial place to rent out, having even the smallest piece of real estate in NYC is undoubtedly the best investment.
Commercial real estate
Income potential is high in commercial properties. An office space makes a lot of sense as an investment avenue. Research into different properties shows that commercial properties may fetch annual returns even up to 12%, while rental income from residential properties remains between 1 and 4 percent. So if you do not already own a property and want to invest, then a commercial property will be a great idea.
Renting to businesses is a great idea.
People develop a personal relationship with their tenants after a few years of tenancy. This usually complicates a business relationship and may also land the landowners in a soup at times. On the other hand, renting a business is a completely professional relationship. Small businesses or a large branch of a company will execute a professional lease, and that is a good place to be when you want to negotiate the rent in the future or at the time of vacating peacefully without any conflicts.
Also, they will keep the place immaculate to create a good impression on their clients. They will focus on the external appearance and the amenities in the place and ensure that everything looks and works well for their clients. Some people even feel that commercial property rentals appreciate time due to their continuous maintenance and upkeep.
Less burden on the owner
A residential owner may receive a call in the middle of the night if the tenant needs an emergency repair. But commercial properties are functional only during office hours, and such inconvenient disturbances are uncommon. They also maintain the property well, so the calls for repairs will be fewer or none while renting your property. This issue can be solved by tying up with a property management company, too, as they take care of the regular maintenance of your property being leased through them. They usually have a team of handymen who can take care of the repairs without disturbing you.
The advantage of leasing your property to a business
Usually, people rent a house for a shorter-term while they plan to buy their own house or move out when they want to move to a larger or smaller house. But businesses rent out places for a long time. This may be beneficial as you don’t have to refurbish the place every time a tenant moves out. Consider the expenses of advertising, repainting, lease documents, and a long-term lease winner for any property owner. In addition, some businesses agree to sign a Triple Net lease, meaning they will pay the taxes and maintenance while they occupy the premises. This is an added advantage, and you can relax after signing the lease, though this may not be the case with every commercial property lease.
Some issues with commercial property investments
It is not as if everything is easier with commercial property investment. Like everything else, it has some negative aspects too. Commercial properties may bring in high returns, but they are more expensive too. The seller may also insist on a higher down payment than residential property. Some properties may have very clear documentation from the time of the first owner, and builders may give you all the documents. But at times, the chain may be confusing, and some documents may be missing. You cannot trust the verbal promises and must ensure that all the documents are in order. It would be a good idea to hire a property management company or a lawyer to scrutinize the documents before you sign the lease.
Hire professional is a good idea
Though it seems like an easy process to own and rent out a property in NYC, it will be easier if you have a team of professionals taking care of the same. You may have to pay them their fees or commission, but the service will be worth that. It is also advisable to hire a professional team if you have a residential property that needs more monitoring, repeated repairs, and frequent lease signing than a commercial property would.
Hire a property manager after thorough scrutiny. You can hand over the property for a small fee and let them take care of all the legal aspects, financial documentation, etc. Real estate management companies have financial advisors, tax experts, legal experts, and you can rely on them. Most good companies have online systems now, where you can retrieve your financial statement any time of the day.
Conclusion
Both residential and commercial properties are good investments in NYC. Whether you are an investor and live in the same city or live away from NYC, you can still get the advantage of investing in one of the most expensive property markets. Depending on the budget, you can invest in a small condo or a commercial property. It will be easy to manage the property with the help of a property investment manager as they know all the regulations and the market. Find an experienced agent to handle diverse portfolios in this city and sit back to enjoy the returns.