Commercial property investments seem strangely under-discussed. Considering examples of attractive bargains, why do investors favor residential deals and do banks impose harsher lending criteria for commercial assets?
Commercial real estate investing is often less common simply because determining the value and performance of these assets is not as straightforward as with residential properties. When I worked in the industry, I noticed that banks tend to require more stringent financial documentation and deeper market analysis for commercial loans compared to residential ones. Additionally, managing commercial properties can demand a higher level of expertise due to longer vacancies and varied tenant needs. This complexity makes residential investing more attractive for many, particularly those new to the market.
I’m thinking commercial deals might just seem trickier with tougher bank terms and more complex management, right? Could market uncertainty be another factor? What experiences have you all had with commercial property investing?