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The benefits of commercial property investing

On Behalf of | May 17, 2017 | Commercial Real Estate |

There are several reasons why real estate investors in California and around the country may be drawn to commercial rather than residential properties, and this may be especially true when they are landlords. Residential renters often complain belligerently about relatively minor issues, and they may ask their landlords to intervene when they become embroiled in petty disputes with their neighbors. However, commercial tenants rarely bother their landlords unless the situation is pressing and their options are limited.

Customers often associate businesses with their locations, and the owners of thriving stores or restaurants may be extremely reluctant to uproot even when their rents are raised substantially. While residential tenants may have sentimental attachments to their homes, these feelings will rarely be enough to stop them from moving if they find a nicer house at a lower rent in a more desirable area. When businesses do move, they will generally try to do so amicably to avoid negative publicity, disputes and possible lawsuits. Residential tenants will generally be less concerned about being sued.

Business tenants may also have their own maintenance crews to take care of routine tasks that residential renters would likely call their landlords about, and they may also cover expenses like insurance coverage that residential landlords will usually be expected to pay. Restaurant, retail store and service sector landlords often benefit greatly when their tenants are successful. When commercial tenants attract large amounts of foot or vehicular traffic, demand for space and rents may increase as other businesses are drawn to the area.

Attorneys with commercial real estate experience may draft lease agreements that appeal to business owners while protecting the interests of landlords. They could also help landlords to avoid making poor decisions by running background checks on prospective tenants.