Four Reasons To Consider Retail Properties For Your First Real Estate Investment

Four Reasons To Consider Retail Properties For Your First Real Estate Investment

26 September 2018
 Categories: Real Estate, Blog

There are many ways to invest in real estate, but often retail business properties are not the first type of investment that people focus on. However, there are many good reasons to look for a good retail location for your first real estate investment. The following are only a few good reasons to concentrate on this area of real estate.

You have a business relationship with your tenants

As a real estate investor, you are a business owner, and with a retail property, your tenants are business owners as well. When speaking to them and working with them on issues regarding the property, you will find your tenants act in a businesslike manner, both cordial and professional. This is not always the case with residential tenants, especially when problems develop.

The landlord and tenant relationship becomes a partnership

In a manner of speaking, your investment becomes a partnership. This is because each of your tenants are business owners who are trying to make money. They have a vested interest in keeping the property clean and in good condition. When renting apartments, for example, you can lease to a bad tenant who damages your property. Not all of these damages can be recovered by a security deposit. Investing in a retail property means you still need to maintain the property, but your tenants will do their part, so both parties are working together to protect their investment.

There are fewer regulations

The laws regarding landlord and tenant are written at the state level, and they differ from one state to the next. But in general, when renting to residential tenants, there are many consumer protection laws that simply do not exist with retail properties. This alone is a great advantage. For a first-time investor in an apartment complex, you may need to hire a management company to handle the specifics of complying with laws regarding the landlord and tenant relationship.

Your tenants will keep business hours

Some retail stores may be open for extended hours during the weekdays with shorter hours on the weekends while other businesses may be closed on the weekends. But in general, business hours are limited to a portion of the day. If there is an issue that requires your attention, you will likely be needed during business hours. Residential properties can have emergency issues that happen 24 hours a day. Water leaks are only one example of this type of problem.

There are many things you have to learn before investing in real estate for the first time. However, if you focus on a retail property with several tenants in a good location, many of the problems and headaches that you may have with residential properties are eliminated.