Ever thought about owning and renting out a small office building or strip mall? If you're really motivated and willing to roll up your sleeves, you might consider such a real estate investment. Generally, you're better off not investing in commercial real estate; it is much more complicated than investing in residential real estate. It's also riskier from an investment and tenant turnover perspective. When tenants move out, new tenants sometimes require extensive and expensive improvements, which you'll likely need to provide to compete with other building owners.

If you are a knowledgeable real estate investor and like a challenge, there are two good reasons to invest in commercial real estate. The first reason is if your analysis of your local market suggests that it's a good time to buy.

Another reason to consider buying commercial real estate is if your own small business might use some of the space. Just as it's generally more cost-effective to own your home rather than rent over the years, so it should be with commercial real estate if you buy at a reasonably good time and hold for many years.


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