Office space: are they worth the hype?
The start of a new year signifies more than just turning a calendar page; it symbolizes a blank canvas upon which individuals can paint the picture of their aspirations and financial dreams. For many, this involves exploring new avenues of investment, and real estate stands out as a solid foundation for building wealth and securing a brighter future.
From widening your investment portfolio to achieving financial freedom through passive income, there are numerous advantages and benefits from investing in real estate. Not to add that it gives you the pride of homeownership.
In this article, let’s dive into the wonderful real estate investment opportunity that lies in commercial real estate, particularly in office spaces. Let’s unravel the reasons why you should consider investing in office spaces this 2024!
Office Spaces: A Rebound
According to the Property Market Report Q3 of 2023 published by Colliers, the completion of new buildings beefed up the office space vacancy rates.
Is Buying Office Space a Good Investment?
As the office market continues to expand in the country, here are several reasons whu you should consider investing in such commercial property.
In demand
Flexible office areas and coworking spaces are currently in demand in the real estate market, and they are a staple in major cities like Metro Manila, Makati City, and Bonifacio Global City. Industries like Business Process Outsourcing (BPO) proved to be main drivers of such high demand so having a property that’s in a constant need by everyone is good news for your rental yields.
High return
Usually, high demand equates to high returns. As the demand for office spaces continues to expand, so is the potential growth of your property.
Steady stream of income
Commercial properties such as office spaces usually have a long term lease, meaning you can expect a steady stream of rental income since your tenants stay for a long period of time. This also removes the worry and hassle of finding new tenants to stay each year as usually leases last for 2-5 years, or longer depending on your agreed terms.
Companies won’t be bothered to move out so soon since it will be impractical and financial loss on their part considering the amount of time and finances they invested in your space such as renovations and improvements. In the end, it’s a win-win situation, especially on your part!
Capital appreciation
Office spaces, just like other properties in the real estate industry, hold the potential for property appreciation. A couple factors such as location, property condition, and renovation may affect on the market value of your property.
What are the drawbacks of investing in office space?
Maintenance costs
Office spaces require regular maintenance, which may leave a small dent on your bank account. But with proper planning, budgeting, and choosing the right maintenance company will help you manage such expenses.
Low Occupancy Rates
We can’t always trust the season to be in favor of us and the same thing goes for your rental business. There’s always the risk of losing your tenants or your property being vacant for a long period of time. One way to avoid this is to invest in properties located in bustling areas such as urban cities.
Final Takeaway
This 2024, the benefits of investing in commercial real estate like office space slowly emerges as we turn over a new leaf. The various potential it hold from yielding high returns to providing a steady stream of income makes it an attractive option for individuals seeking to capitalize on the dynamic market of real estate.
As we widen our horizons the following year, the allure of investing in commercial real estate remains brilliant. If you are in to widening your portfolio while at the same time wanting to achieve financial freedom, then this may be a good path for you.
But remember, just like any other real estate ventures, this avenue also require strategic planning, careful research, and commitment. With the wide scope of the real estate market, heeding thoughtful tips and reminders should not go overlooked. The wisdom of considering factors such as location, market trends, and financial planning becomes a compass guiding investors toward prudent decisions. Additionally, the emphasis on thorough research, due diligence, and staying abreast of regulatory changes underscores the need for a well-informed approach.