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High-rise commercial properties are amazing structures that tower over cities and present a marvel for the whole world to see. Real estate investors who want to get a piece of the commercial real estate pie purchase these large-scale constructions for housing a variety of businesses and renting out office spaces.
Rent Out Offices to Several Companies
In a multi-story commercial property, the investor has the opportunity to rent out spaces to more than one company. Filling each office and keeping companies in the building helps the investor maximize their profits. The right design allows several companies to fit on the same floor and give the owner more residual income for their commercial spaces. The full dimensions of the building define the maximum capacity of the property.
Increase Residual Earnings with Business Services
Increasing residual earnings with business services helps the investor capitalize on a new revenue stream and provide necessary business services for each company. The services could be outsourced to a different firm or another company investing in the property. However, the investor can charge the tenants a fee for each business service they use. The number of tenants in the building could also contribute to the overall cost of the business services and cut costs down. Evaluating what services are needed in the building helps the investor determine how to set up the building as companies start to move in.
Longer Lease Contracts
Acquiring longer lease contracts keeps the building filled longer and guarantees the monthly revenue stream for the company. The lease contracts outline all requirements for the businesses and create a legally binding guarantee for continued payments throughout the duration of the lease. Some companies will commit to several years instead of just one. This increases the potential earning potential for the investor and increases their monthly profits. Renting out to smaller businesses gives the commercial property owner more spaces to fill and maximized profits.
Upfront Security Deposits
All companies that choose to set up shop in the new commercial building will provide a lump sum security deposit. The security deposits can include the first and last month’s rent in addition to the standard deposit fee. Investors receive larger payments from each company as they move in, and the capital can be used for improving the property and repair any sudden issues that emerge.
Common Area Maintenance Charges
All tenants must pay common area maintenance charges for using conference rooms, lobbies, lounges, and other rooms accessible to all companies. The fees help the investor maintain the building and address problems such as the bathroom plumbing. All fees are paid with the monthly rental payments and increase the owner’s emergency reserve.
Property investors consider the advantages of commercial real estate and find that larger buildings offer maximized profits. High-rise buildings house hundreds of companies each year. The opportunity could prove lucrative for investors who want to offer better options for smaller and mid-range companies. Real estate investors who want to learn more about buying commercial real estate learn about National Realty Investment Advisors now.
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