The most common question that many investors seek answer to is, whether to go for commercial real estate or residential real estate? As a matter of fact, real estate investment is itself a wonderful investment tool irrespective being a commercial or a residential one. Though either option can give you great returns but most of the people consider residential estate investment as their first preference. Though this is the most common route but there are certain additional benefits attached in dealing with commercial real estate properties.
It is easier to acquire capital for a commercial property than for a residential one. If the three options (hard-money lender, private money or traditional financing) are exhausted then the only option left is creative financing which is not easy to get on with. Whereas, if you are dealing with commercial property, then you can easily find other investors who are willing to pool in their capital together and get along with you. So in case of commercial investing, you also get to access the capital from private firms or REITs or hedge funds and many more in addition to the once available in residential ones. for related information, read the article: http://www.webbreakingnews.com/2016/05/03/ares-commercial-real-estate-corp-acre-upgraded-to-hold-at-zacks-investment-research/
Looking from the market perspective, as maximum investors hunt for residential properties, the competition in case of commercial real estate is comparatively less and thus there are better chances of landing into a better deal. And the last but not the least point that I would like to make here is the valuation of the property. In case of residential property, its valuation is done as per the prices of the neighboring areas. So no matter if your property has any additional features, it will still be valued to the one next to yours. But in case of commercial one, the valuation is done on the basis of the amount of revenue that area can generate. So by increasing the revenue generated by that area in some way can increase the valuation of your property manifold.