How did you get into it? What sort of properties do you own, or own shares of?
Yes, I think residential is easier and simpler to get into. Everyone learns to pay rent and what that process is like, so the process is easy to digest.
I'm very interested in commercial too, and I like how it's so much more analytical/cut and dry. It seems more expensive though and less stable. Even in another covid crash or whatnot, everyone will need a home. Whereas if you got into office buildings, you had a rough few years.
Well I wouldn't touch office buildings as cheap as they are right now, unless you plan to gut it and do something funky with it which many are doing successfully. But that's been true for a very long time office buildings have been two thirds vacant for decades coofid just pushed them over the edge, I can't remember the last time I saw straight office buildings being built unless a massive conglomerate is just building one for their own purposes because they wanted it in that specific place.
I wouldn't say commercial is less stable than residential they both have different factors which can hurt values and the returns on commercial are far far greater with less of a mess, in general unless there is some extenuating circumstance both are "safe". Just as covid killed office buildings there was the housing crisis which completely obliterated ALL housing, not just one segment of it. It's just by a different measure, in commercial your money is going to be tied up more so than residential.
I bought my first commercial building in the late 2000's in my mid 20's. I actually bought it to house my e-commerce business but it was two large units so I leased the second unit out. Eventually I downsized and moved my business and leased the other side out as well. For what it's worth now I completely stole it but that was during the recession it's not like that anymore there are no steals but there is still tremendous upside if you're willing to put the cash down, it's also true for residential there are no more steals. All the commercial I bought after that was pure speculation, I was young and didn't have the cash at the time when all the shopping centers and multi units buildings were selling for next to nothing and now it costs millions and millions to get into that game. I've bought stand alone buildings more recently and I found them just driving down the road and thinking it was a good location, businesses that closed and the buildings were empty along busy roads or warehouses that needed some rehab....things like that.
It's a different game with commercial, the big boys swallow up anything that will see instant returns with tenants and they are priced sky high. If you're not one of them you have to buy things as speculation and sit on them, but the potential returns can be massive. My father and uncle always come to me asking if I want to invest in this or that with them saying I shouldn't just leave my money sitting and they are right but for them they are willing to take on a 10 year investment they are old and have that kind of money, I'm still young I can take that money and make it work for me doing something else with it. Of course all those things from ten years ago they'll come back today and say "see you should have invested in it" and funny part is they're always right. My cousin bought a closed down bank a couple years ago dirt cheap and just recently chipotle decided they wanted to move in to the spot, the guy is about to have them sign a 20 year lease at the most ridiculous rate you've ever seen if he had no other income at all he and his family could live very comfortably just from their lease payment alone.
I guess it's a question of would you rather buy a commercial building as a speculative investment that has massive life changing money upside but it could take years and tie up your money or a residential property with very little upside but you'll be collecting very small returns right away. Myself I'll take the commercial property, dealing with tenants and house maintenance made me want to pull my hair out for the few residential properties I've dealt with over the years and I have stable incomes along with experience and connections in it, everyone has a different situation.
