Let's start by defining what commercial real estate is. Commercial Real Estate refers to properties or land that will generate profits. This can be a commercial property that you will use for your own business or a property you plan to rent out to generate income. Some examples are office buildings, hotels, retail spaces, warehouses, multifamily buildings, among others.

The benefits of owning commercial real estate for your own business can be many, ranging from increased exposure to independence and more. There is also the possibility that you are investing in a commercial property to rent it out. This can potentially increase your cash flow and grow your financial wealth in the long term.

Here are some benefits of investing in commercial real estate:

Increased Cash Flow

Commercial real estate provides you with an increase in your monthly, quarterly, and/or annual cash flow due to the rent paid by tenants.

Diversification

While stocks, bonds, and others are great ways to save money, it is advisable to diversify your investments to ensure you get the best return from them. History tells us that markets can change, however, the stock and real estate markets are not necessarily correlated. While one may go down, the other may not be affected. So, while one may not give you the return you expect, the other still can.

Appreciation

A property can increase in value. This is not only determined by what is happening in the market in the area but also by its Net Operating Income (NOI), which is calculated by subtracting operating expenses from rental income.

A real estate broker specializing in commercial real estate will help you research the market, negotiate, interpret contracts and financial reports, and guide you through the entire process.

Some may think that investing in a commercial property may require large amounts of money. In reality, these days there are many options available, such as SBA loans, commercial loans, and even the option of finding investors to partner with. Talking to a qualified commercial lender is one of the first steps to determining your purchasing capacity.

As I always tell my clients, always think about the big picture and what are your goals. Growing your financial wealth opens many doors for your and your family's future.