According to some experts, if you want to be rich, you should try real estate investing. Many individuals today are living at the peak of wealth because of their real estate investments. Anyone can be a commercial real estate investor, all it takes is a bit of knowledge and determination.
Even if you're new to commercial property once you learn about the commercial property cash flow system, you can accelerate your cash flow and wealth. Perhaps you were once a renter before you became a homeowner? This is the most basic start of most people's knowledge of property investment. Moving on from this, most Australian property investors that start investing in commercial, start off small.
Take this example –purchase several shops and have them rented. In about 20 years, you can have already paid off the mortgages. The value of your property has already doubled or more by this time and not only that, the rental rates are already doubled. Another advantage is that you don't have any loan payment. You can now live from your rental income.
Commercial property investing is pretty much driven by the numbers, this means that the value is based on the rental income. When you start looking for commercial properties for sale, you will notice that the agents will say things like “showing 9% net return”.
Simply put, if you bought a shop for $100,000 showing a 9% net return you would be putting $9000 per year into your bank. This is after running costs, but not the mortgage payment. Let's say that your mortgage was at 7%, this would mean that your payments would be $7000 per year. So you would have a $2000 surplus from this property per year.
Management is the key to your success. If you plan to hold properties over the long term, you should know how to manage them properly.
You can manage them on your own, or you can have a company manage it on your behalf. You will be both a landlord and a real estate investor. You need to gain knowledge of commercial property leases so that you can learn the jargon that is used.
Although some people don't like the image of landlords, you can be a better one. It's best to set up a win-win situation with your tenants, after all if they are successful, you will be too. The rental properties provide you big dollars. You should concentrate on buying several properties in well-chosen locations.
The choice is yours. Now that you have an idea of how much you can earn in real estate investing, don't you think its time that give it a try? Gather capital and study the market. Consult experts so that all your decisions and actions are guided.
If you have the guts and knowledge, being in the commercial real estate business will give you ongoing income in the coming years.