Property law is more flexible towards commercial lease agreements. You are able to add any clause that is agreeable to the contracted parties. It is common to get charges interest on the away standing rent or secure the premises on ongoing default of rent.
Probably the biggest risk in commercial real estate investment is finding a new tenant in case of a vacancy. In commercial real estate the need of each tenant in conditions of size, location, use and rent repayment capacity is so different that it is very difficult to find the right tenant for the right property.You can also click here for additional information about commercial real estate investment.
For the reasons mentioned above additionally, it is difficult to sell a commercial property investment. Larger the value of property there is lesser range of investors to buy the property. A commercial property investment is a much less liquid than other purchases simply because there are incredibly few players on the market. Pertaining to a residential house you will have hundreds of potential purchasers which are not the situation with commercial properties.
Professional real estate investments are usually sold on capitalization rates and rarely on replacement unit value. It is, therefore, possible to acquire an inadequately rented commercial property well below its market value. You can also raise the value of your commercial real estate simply by raising the rents during rent reviews or renegotiating the lease conditions when it comes to renewal.