The Advantages of Commercial Real Estate

Investing in real estate is a great way to put your money to work in this economy.  With the many different types of investments that are available, it has been proven time and time again that commercial real estate has an enormous amount of benefits.

Often times, commercial real estate leasing contracts are longer than those of residential.  Residential real estate leases are usually short, whereas the commercial properties typically have lease agreements from 5-10 years in duration.  Assuming the tenant(s) do not vacate or go out of business, this long term provides for stability in the investor’s portfolio.  Advertising and marketing costs are much lower in commercial real estate properties as well due to the lower turnover rate.  People often switch apartments within 1-3 years, however, businesses do not move as frequently.

Another advantage of commercial real estate is there is typically less maintenance responsibilities for the property.  Triple net lease agreements provide for all maintenance of the property be the responsibility of the tenant.  In residential real estate, it is usually the investor’s responsibility to take care of the property and any associated maintenance and/or repair work.

Commercial real estate investing is a profitable endeavor if you have the time and patience to put into it.  On the other hand, it can also be a very risky business if you have not done the proper research or sought the advice and assistance of a commercial real estate professional.

Venezuelan Investors Find Interest In Southern Florida

It’s no secret that there has been a significant rise in Florida real estate.  We partly have foreign investors to thank for this rise.  Latin Americans have been taking it upon themselves to invest in a variety of Florida properties.  According to the Miami Association of Realtors,  it is Venezuelans who are leading the international investors, closely running with those from Argentina and Brazil. 

So, why is Venezuela investing in our market?

Well, part if it has to do with the amazing deals that can be found in Florida.  Many of the investors are coming over and paying cash for their investment.  These wealthy investors find what they perceive to be a “great deal”, and don’t hesitate in placing their money into some American real estate.  

Cleto Puzzi called it the “Chavez effect”, implying the Venezuelan president Hugo Chavez is to blame.  Puzzi states that “you cannot invest in Venezuala these days”.  Evidently the investment opportunities in Venezuela are scarce, and the wealthy must go north in order to make their money grow.

This international investment growth has helped out the Florida market immensely.  It enabled many real estate developers to develop more properties.  Florida is named the top real estate opportunity for foreign investors- southern Florida being specifically in the lead. 

Although many of the investments are currently residential; there is no limit to what could be done commercially.  Historically, an increase in residential sales often leads to an increase in commercial sales.   The rapid rise of the residential international investments could be a direct link to the rapid rise in commercial real estate investments.

This trend of investment will hopefully expand.  Although the majority is lead by Latin America, some are expecting for European investors to make their way to southern Florida.  As long as the deals are present, so will the international investors.