Commercial properties, such as offices, retail outlets and warehouses, typically provide higher rental yields and longer lease terms. This can result in more stable income and less frequent tenant turnover.
But, commercial investments often require higher capital outlays for the initial purchase and ongoing maintenance, due to their larger size and complex systems like air conditioning and electrical. They can also be more vulnerable to economic fluctuations, impacting your property's vacancy rate and rental income.
On the other hand, residential properties, like houses and units, may offer lower rental yields but are in high demand thanks to the ongoing shortage of housing. The process of selling residential property may also be easier, with a larger pool of potential buyers.
Choosing between investing your money in commercial or residential property will depend on your financial situation and long-term goals, as well as how comfortable you are with risk. Finally, your experience in buying and managing investment properties will play a role.
But, with the right strategy, both can offer good rewards for investors.
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