Investing in commercial property is a very popular way to set up significant income channels, but there are many different ways to do it. For instance, if you own a commercial property, you could sell it and use the money you make to buy another property- perhaps a larger, more valuable one- or lease it out and make monthly income.
But what is best for you? It all depends on your goals and long-term plans.
Holding and selling later
With long-term investing, you are often looking to the future. You believe the value is going to go up dramatically. Perhaps you bought the property in an area that is being developed. Once that happens, you plan to sell for much more.
Overall, holding property for longer tends to get you better returns in a situation like this. Remember, you can always sell. Flipping it immediately may make sense in some cases, but you can lease it out for years and make an income — while also covering your costs — and then make more in the sale a few years down the road.
In other words, you may not have to choose. There is a risk to holding if the value goes down, but prices do tend to rise, and you can identify things that will make them do so, such as the development in the area. You can then lease until you think it’s an optimal time to sell.
Working through complex transactions
While doing this, the contracts and other elements of the process can grow complex. Be sure you know exactly what legal steps you’ll have to take to do it properly and to maximize your earnings.