Commercial Real Estate Investment
Positive Factors that Impact on Commercial Real Estate
The positive impact factors on commercial real estate have contributed immensely to its rapid growth. The growth of this sect
or has had other positive impacts to a different sector of the economy. Some of them are outlined below.¬†
- Source of a Long Lasting Income
Commercial real estates play a significant role in providing a long lasting source of income to the investors. This is one of the motivating benefits that have made a majority of people to channel their funds in this sector. Once the initial capital is ploughed into this venture, it will require very limited maintenance costs thereby giving potential investors huge profits.¬†
- Access to Loans
Investors who own commercial estates have unlimited access to development loans from financial institutions since the title of ownership can be used as a collateral in the banks. The ultimate result is that investors will be able to increase their capital base.¬†
- Social Security
This type of venture is a life time investment that will guarantee social security. Once one has the real estate, he/she can be guaranteed of income and can leave it for his/her family (heir) to continue enjoying the benefits accruing from it.¬†
- Provide Great Employment Opportunities
With the development of real estates, middle men have been accorded employment opportunities. They are very important since they facilitate transactions between the investors and potential clients by providing the relevant information and possibly creating awareness about the commercial estates. This is done through their licensed agency bureaus.
- ¬†Cushion against Financial Loss
By educating people on the relevance of commercial real estates, most investors have opted to withdraw their cash from banks and channel them to this noble activity. Liquid cash has a tendency to depreciate in value and is prone to inflation. By investing in real estates investors are safely cushioned against this financial loss. The interest generated from commercial estates will always be higher as compared to that from the savings in the bank.¬†
- Restoring the Beauty of the Environment
Commercial estates have triggered an urge for more housing units in different places. In this regard, derelict land has been reclaimed and a commercial estate put up. This sector therefore plays a critical role in restoring the beauty of the environment.
- Promotes Other Business Sectors
The growth of real estates tends to promote other business sectors. Established investors will have the opportunity to diversify into transportation and procurement services. This way the economic development of that locality is greatly enhanced.
- Availability of Quality Commercial Units
The establishment of high quality commercial units is another positive impact brought about by the development of real estates. Investors will desire to have their properties let out within the shortest time and therefore will insist on quality construction. In some cases, investors are given special incentives by the authorities to inspire them to continue the task putting up more commercial units.
- ¬†Growth of the Stock Market¬†
Very established commercial estate developers have gone to great lengths to form organizations that represent their interests in the stock market. This provides an avenue for other interested parties to purchase shares relating to those commercial units. This method is very suitable for individuals who do not have the ability to purchase the units at once due to financial constraints.
- ¬†Real Estates Appreciate¬†
The value of real estates tends to appreciate with time thereby increasing the net worth of the property. This has given investors a chance to grow and expand the business.¬†
- Improves the Standards Of Living
Once the commercial real estates are constructed, people can earn a stable living from there and this allows them to satisfy their needs as well as those of their dependants. Growth of other sectors of economy as a result of growth of commercial real estates leads to an improved standard of living for the residents or citizens.¬†
- ¬†Increase the Sources Of Revenue¬†
Once commercial real estates are established and clients occupied them, the government can be able to earn revenue from the goods manufactured or processed in this buildings, as well as from the services the occupants offer. This is achieved through tax.¬†
Investors have learnt to be patient as they await higher returns from their commercial estates. They have known when and where it is appropriate to embark on a new project. The middlemen on the other hand have developed very good customer relations skills. The two forces combine to make this business a success.¬†