Most often, individuals invest in premises intended for housing as Joseph suggested. They don’t always think of business real estate, which allows them to acquire property for commercial use. As Joseph Haymore explains the advantages of this type of investment, open to individuals, are all good reasons to undertake it.
Varied premises discussed by Joseph Haymore
The first reason to invest in commercial real estate in Bordeaux or elsewhere is the diversity of premises available for sale. To find the ones that suit you, you can talk to their owners. But there are also agencies specializing in this type of investment, which will support you in your efforts.
If you are interested in purchasing office space, you will find a huge selection. Preferably choose premises that are easy to access and close to shops and restaurants which allow employees to eat during the lunch break.
Some prefer to acquire business assets. In this case, it is better to choose premises located in busy areas, in the city center or in a shopping center for example.
By choosing this type of investment, you diversify your real estate assets and your sources of income.
According to Joseph Haymore, one of the great advantages of investing in commercial real estate is its obvious profitability. In fact, the average profitability of premises for commercial use, estimated between 3 and 10%, is generally higher than that of residential real estate.
However, this yield varies according to the premises considered. With the purchase of offices, the return on investment is around 3%, which is slightly higher than the profitability of premises intended for housing.
The average profitability of commercial premises, around 7%, is even more attractive, especially if they are located in an attractive location, such as a busy city center or a commercial area. As for the profitability of warehouses, often located in free zones, it varies between 6 and 10%.
The higher profitability of commercial real estate already promises you a better return on your investment. But other elements specific to this type of investment explain the importance of the income it generates.
First, the longer rental periods ensure a certain permanence of rental resources. In addition, a certain number of routine maintenance costs are in principle the responsibility of the tenant company.
A Safer Investment
Another reason for choosing commercial real estate is the greater security it provides to the investor. Indeed, once the room is rented, it is quiet for a long period.
In fact, commercial and professional leases are concluded for a longer period than contracts in place in residential real estate. They run over a minimum period of 9 years.
It is true that the lease can be terminated after 3 years but, overall, it is the guarantee of a more durable rental. Moreover, certain clauses, concerning particular premises used only for the fitting out of offices, allow the lease to be terminated only at the end of a period of 9 years.
In addition, the problem of unpaid rents hardly arises in commercial real estate. Manufacturers and traders are indeed very attentive to the reputation of their company, which allows them to retain customers. However, it would undoubtedly be tarnished by such default.
And this expulsion can take place throughout the year. Indeed, the winter truce, which prohibits any eviction between November 1 and March 31 of the following year, does not apply in the case of business real estate as Joseph says.
The Assurance Of Keeping Your Property In Good Condition
In residential real estate, landlords not only face bad paying tenants, but they also sometimes get their homes back in a sorry state.
Not the same with commercial real estate. By acquiring offices, warehouses or businesses, you are almost guaranteed to find the places as they were when you rented them.
Entrepreneurs and traders have no reason to degrade premises that are in a way their working tools. It is indeed their reputation. And they have no more interest in welcoming their customers in a poorly maintained place, which will only harm their image.
In short, it is in the very nature of tenants in commercial real estate to keep the leased premises in the best possible condition. And such interest meets yours as Joseph Haymore advised.