Small Commercial Real Estate – What is it?
What is small commercial real estate? It is just what it sounds like. It’s an 8 unit apartment building or a 50 door apartment complex. It’s a 4 unit retail strip center or a tier-2, class B neighborhood shopping center. It could be that house on the side of the road that is converted to commercial zoning so it can be used as an office space or an entire building of office condos.
However you define this class of property it typically is valued as less than $5 million and has a clientele that typically does not have that sophisticated corporate feel but are more grounded in the community where they live and work.
Why Invest in Small Commercial Real Estate?
Investing in small commercial real estate is great for investors with limited funds and who are looking for better cash flow than is derived from owning a portfolio of residential investment properties. As a matter of fact, those real estate investors owning 5 or more homes as investment should seriously consider diversifying their portfolios with some small commercial real estate assets.
Think of it this way, it is not wise to own stocks all in the same category. Diversification breeds stability in a portfolio. The same holds true with real estate investment properties.
Is Small Commercial Real Estate Affordable?
The answer is YES! Some properties are as low as $100,000 but produce more income than a single family home of the same value. Dealing in Small Commercial Real Estate has a very similar feel but with some distinct advantages. Many times the tenant is responsible for minor and sometimes major repairs and upkeep of the property. Additionally, commercial real estate’s sole purpose as an investment is to generate current income versus the annuity style investment one finds with residential real estate investment properties.
Small commercial real estate as an investment is a great route for those seeking to boost current income while reducing the high capital costs and headaches associated with owning a portfolio of residential properties. With EnTrust Realty’s EZ | RE investment property acquisition and property management program, diversifying an investment portfolio into small commercial real estate has never been easier. Contact us today!