In today’s market, there are numerous investment opportunities available, from stocks and bonds to commodities, cryptocurrency, and commercial real estate. Your choice depends on your risk tolerance, preferences, and long-term goals. here we explain why you should Invest in commercial real estate.

If you’re an investor, whether first-time or experienced, who prefers real estate among other investment options, this article is for you. Real estate is generally classified into two categories: Commercial Real Estate (CRE) and Residential Real Estate. Here are four reasons why you should consider to invest in commercial real estate over residential properties.

Higher Income Potential

Commercial properties offer much higher income potential compared to residential ones. Generally, commercial tenants cover many of the property upkeep costs through Common Area Maintenance (CAM) charges. These charges include building maintenance, insurance, administrative fees, and more. Since tenants handle these expenses, landlords don’t have to worry about them. In residential real estate, tenants usually don’t cover these costs, and if they do, it’s often negotiated in the lease contract.

This means investing in commercial properties can provide greater income returns compared to residential properties. Commercial real estate is not only a reliable source of income because tenants cover various fees, but also because commercial tenants tend to sign longer leases. They prefer stability and avoid the hassle of relocating their businesses frequently. As an investor, consider this: instead of earning a few hundred dollars a month from a rental home, you could earn thousands or more by choosing the right commercial properties.

Quality Tenants

Commercial properties typically attract stronger tenants than residential properties. If you’re a residential property investor or landlord, you may receive frequent calls from tenants about issues with their rental homes. While it’s your responsibility to address these concerns, many of these calls come at inconvenient times, like late at night or on weekends.

These scenarios are rare in commercial properties. Tenants in commercial spaces tend to be more professional and often have their own maintenance teams to handle issues. Additionally, commercial tenants usually operate during regular business hours, so any calls you receive will be at more convenient times. Investing in commercial real estate not only gives you better quality tenants but also spares you from late-night emergency calls.

Less Competition

The competition in the commercial real estate market is lower compared to residential real estate. Residential properties are common and widespread, making commercial properties appreciate differently. Many investors often overlook the value and potential of CRE, leading to less competition. Financing is typically more challenging for CRE, reducing the number of potential buyers compared to the residential market. As a result, those who qualify can explore more options with fewer competitors.

Investing in CRE not only offers higher returns but also provides more income opportunities and profit potential.

Property Value Appreciation

A wise investor carefully selects what, where, and when to invest. Investing in a commercial building is often a better and more secure option compared to a residential property. Why? Because commercial real estate appreciates faster than residential real estate.

One key difference between residential and commercial real estate is how property values are calculated. While comparable properties heavily influence residential real estate values, revenue plays a significant role in determining commercial real estate values. Additionally, commercial properties are less susceptible to market fluctuations, making them a safer and more stable investment.


Even after outlining all the information above, writing a letter of intent (LOI) can still seem daunting. That’s why the Leveraged CRE Team at Commercial Properties, Inc. is here to help locate commercial space for lease and assist in using a letter of intent to land such space.  Contact us at (480) 330-8897 or send us an email at request@leveragedcre.com.

Need assistance with your 1031 Exchange or DST? We’ve got you covered!

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Meet The LeveragedCRE Investment Team

Phill Tomlinson and Eric Butler are seasoned commercial real estate brokers with over 44 years of combined experience. They lead the LeveragedCRE Investment Team at Commercial Properties, Inc. (CPI) in Scottsdale, Arizona, specializing in investment sales and tenant/landlord representation across the Phoenix and Scottsdale submarkets.

The team leverages their extensive knowledge and expertise to help investors and property owners maximize their returns and navigate complex real estate transactions with confidence.

Stay informed with the latest in Commercial Real Estate strategies designed to enhance your income property investment results by bookmarking www.leveragedcre.com. Let us help you stay ahead in the market! Invest in commercial real estate now.