If you’re considering investing in property then you have a major decision to make. You can choose to invest in residential property such as a condo, apartments, or a multi-family home. You can also choose to invest in commercial property like storage units, stores, and even mall locations. Choosing between the two can be difficult, for most, but here is a quick comparison.
Residential Property
Residential property is probably the most popular property investment choice because it is always in high demand. People will always need places to stay, and with the high cost of buying a home, renting is usually the best option. Types of residential property that is popular in and around the Seattle area includes student housing, apartment complexes, full family homes, multi-family houses, and condominiums. You can choose any of these, although historically, the more units in a building, the more cost effective it is to invest in. Some property does better in different areas, for example, student housing is best for areas right around Seattle or Shoreline where the colleges are. Multi-Family housing however does very well in areas around Redmond and Kirkland, where many companies are making hires.
Commercial Property
Commercial property, like residential property, is a huge investment. Depending on the number of units in the property, it might also be more or less cost effective. However, commercial property management has a lot of advantages over residential. For example, property maintenance is usually the renters concern and not the proprietors. Another consideration is that commercial property usually leases out for periods of 2-4 years, unlike the 6-12 month periods usually offered to residential renters. Essentially, you get a longer term of guaranteed income without having to invest as much in maintenance and repairs. However, commercial property is higher risk. For example, you might have trouble renting out large numbers of offices, especially if they aren’t conveniently located downtown. On the other hand, you could grab a prime location and rent them all out.
Comparing the Two
Usually both commercial and residential property investments have a lot to offer investors. Commercial property management is a great deal different from residential and apartment property management, but for the most part, the main idea is that you have to keep the tenants happy and keep the property in good shape. Commercial property management is regarded as higher risk, because if it does not rent out and succeed, then you might be left with dead and worthless property within a few years. However, it is more profitable, so you can consider it as a good option. Commercial and residential property are both all about location, so choose your investments wisely no matter which route you pick.
At the end of the day, the property you invest in should depend on its promise. You wouldn’t turn down a deal on an apartment complex because you wanted to invest in commercial property, or vice versa with an office building. Just remember that the most important things to consider are ROI, and if you don’t know how to handle your new property, a local Seattle property management company can help.