Yes there is always a need for housing, but there is also a need for
commercial spaces. If you own commercial property in a prime
location, it will always be in demand. Its an over simplification to say
everyone is going online. there are very few businesses that are 100%
online (its a fraction of a percentage of all businesses). What if a
business goes under? That does not mean you will have a vacancy, they
may sell the failing business to someone else and they turn it around (I
have a pizza place that has gone through 3 owners and now is doing
very well, they called me about expanding into some unused space).
And if they do fold up and vacate what do you do? Well… you do the
same thing as what you do when someone moves out of your
apartment - you get a new tenant. I own both and prefer the
commercial over residential by far. Both have their pluses and minuses.
Hello all,
I read Ray’s book- The commercial REstate deal maker’ three
years ago. At the time the ranking for profitable commercial
real estate was- Apt building- offices-Shopping center-
Factory.
Do you still approve the above or things have changed? If so
how?
I think only apartment properties are the way to go. Everyone needs a place to live. And with the population growing each year at rapid pace, you can’t go wrong. I’d stay away from office space. There’s way too much of that product on the market. Plus, a lot of business are going online and/or downsizing. I’d much rather deal with apartment tenants than office tenants.
The problem with apartments is that if you have any conflict with a tenant, the laws are tilted toward protecting the tenant (some places more than others.) With true commerical property (renting to a business), the gov’t doesn’t care so much about protecting the tenant.
Yes, some states like California are not landlord friendly. That’s why you must look at places that are in your favor. Texas is one example. But what if you are renting to a business and they go under? It’s not uncommon these days. There will always be a need for housing. There will not always be a need for a business.