You already have the budget, but it still seems so hard for you to decide on which Long Island real estate properties you are going to purchase. Making a real estate investment often boils down to choosing between residential and commercial properties. You may be wondering which of these two can maximize your chances for making a great investment.
Residential properties are referred to as dwelling units. It can be anywhere from multi families, single-family homes, condos and apartment buildings. On the other hand, commercial properties are the ones that take their income from sources that are non-residential. These can be in the form of retail space, offices and even industrial tenants.
Usually, the decision of purchasing Long Island real estate greatly depends on the global issues that the U.S is currently facing. This is why when buying commercial property, it is really important to be cautious about it. For example, the tenant of your commercial property may no longer pursue expanding their space due to financial constraints. This alone can greatly affect you because you need to make some adjustments on this such as lowering your rental rates. Once the demand for rental spaces also declines, you will also find it hard to pay for the property’s monthly fees.
Residential properties are also more affordable to own because there are instances when the rates of mortgage drop. This is why there are plenty of apartment vacancies as the tenants can already afford to buy their own home. There are also local issues that you need to take into consideration. This can also affect your decision in purchasing a property.
However you should also keep in mind that both residential and commercial properties have their own pros and cons. Residential units can be rented easily and the leases are usually short. It is also easy to finance residential unit and you can easily keep an eye of its progress or development. However, these dwelling units must also be managed properly. If you are going to consider single-family home, you will easily lose 100% of your rental once the tenant decides to move out. More repairs and maintenance are required for older houses and this can cost you more time and money.
With regard to commercial properties, less hands-on management is required and you also get to share the expenses with the tenants especially on repairs and maintenance. You can also be sure that renewals are less frequent and you have specific hours set for complaints. When it comes to financing, commercial properties can be more complex than residential properties. Each type of properties has its own pros and cons but the decision will solely be up to you. Long Island real estate is indeed a good choice regardless if it is commercial or residential.