This alone is the best reason to start investing in real estate\u2014specifically commercial real estate<\/a>. Here\u2019s why.<\/p>\n As an investor, commercial real estate properties can provide you with a significant amount of extra yearly income, greatly adding to your net worth. Commercial properties can also be a better option than residential properties<\/a> for a few reasons. Many people assert that it\u2019s easier for them to secure large amounts of capital for a commercial deal than to generate lower amounts for a residential deal. Related:<\/strong> A Look at the Pros & Cons of Investing in Commercial Real Estate<\/a><\/em><\/p>\n Of course, nothing in life is absolutely guaranteed, there are some types of residential real estate<\/a> and some types of commercial property that are better investments than others, simply due to the nature of the business conducted on the property. For example, the self-storage industry thrives in every season, and revenue doesn\u2019t usually diminish when the market drops. There are millions of self-storage facilities across the United States, which means there are plenty of opportunities to invest.<\/p>\n Sometimes a drop in the market can actually increase revenue for self-storage facilities, because when people undergo foreclosure<\/a>, sell their homes, or downsize to apartments, they need somewhere to store their property.<\/p>\n With self-storage facilities, since the entire building is custom built to accommodate the industry, no matter how many times the business changes hands, it will still be a self-storage facility. The demand for this business is almost always high. And while storage facilities can turn over ownership, they rarely go out of business, making the risk of having a vacant building extremely low.<\/p>\n Property value for residential properties is determined by a fairly arbitrary process\u00a0based on the average comps of surrounding properties. So even if you\u2019ve completely renovated your home with massive upgrades, tile imported from Italy, a personal Jacuzzi in every bathroom, and walls lined with gold trim, your property will be valued comparatively with the neighborhood properties. Commercial real estate takes a more sensible approach to value assessment. While the local comps are still considered, the overall value is based on the amount of revenue generated by the property.<\/p>\n Generally speaking, the higher the revenue, the higher the value. This means you can actually stimulate the appreciation of your property by finding ways to increase revenue.<\/p>\n But like any investment, you\u2019ll want to do your due diligence before jumping into an investment. There are many mistakes you could make while investing in commercial real estate. It\u2019s best to learn how to avoid these mistakes from someone who has decades of experience.<\/p>\n![\"Two](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/06\/commercial-deal.jpg\" "\\"\\"")
<\/p>\n3 Reasons to Switch From Residential to Commercial Real Estate<\/h2>\n
1. Commercial real estate provides a larger ROI than residential.<\/h3>\n
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\n<\/em>This is because residential investors are limited to traditional financing and private lenders<\/a>. Commercial real estate investors, on the other hand, tend to pool their capital resources, and many small firms and financial companies are more likely to help in a joint venture because there\u2019s more in it for them.<\/p>\n2. Some commercial properties virtually guarantee ROI.<\/h3>\n
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<\/p>\n3. You can increase the value of your commercial property.<\/h3>\n
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