When it comes to residential or commercial property investment, you’re probably wondering which one is the best investment for you. Rest assured that at NZ Commercial Property Brokers, we are expert real estate professionals who can help!
In fact, in this blog, we will explore the pros and cons of investing in a commercial property or residential property.
Residential Property Investment
Some benefits of choosing to invest in residential properties include:
- Easy entry – investing in residential properties is often recommended for beginner real estate investors as entering the market is relatively easy and cheap (compared to commercial properties).
- Stable demand – the demand for rental properties is unlikely to dwindle down, meaning there’s always demand for residential properties.
However, there are still drawbacks to consider, such as:
- Ongoing costs – as the residential landlord, you’ll be responsible for a number of ongoing costs, including maintenance.
- Lower return on investment (ROI) – compared to commercial properties, rent is cheaper, meaning that you can expect a lower ROI.
Commercial Property Investment
In the meantime, investing in a commercial property might be the better option for other investors. In particular, you can expect:
- Higher ROI – rent for commercial properties is certainly higher than rent for residential properties, and if you own a building with multiple offices/spaces for different businesses, then the earning potential increases.
- Financial security – commercial tenants are likely to stay in the same space for a longer period of time, so commercial landlords don’t have to worry about finding new tenants frequently.
You should still consider potential cons to being a commercial landlord, including:
- Higher initial investment – entry costs into this market is higher, so you will need more money for the deposit and other fees.
- Maintenance costs – you will be responsible for the upkeep and maintenance of the property (depending on the lease contract with the tenant), and this can be expensive.
Here at NZ Commercial Property Brokers, we offer a wide range of quality commercial properties for sale or lease, allowing you to find the perfect investment property for your needs. Find your next commercial property investment within our collection of commercial properties in Hamilton, Cambridge, and the wider Waikato region. Get in touch with our professional real estate agents for more information or for any further enquiries.
