We all know that having a diverse investing portfolio is very important. Being diverse protects the investor against drops in a specific sector because hopefully the other sectors in which they have invested in have remained solid. The fact is that you can even diversify within your portfolios for each of those sectors and a great place to do that is with your realty portfolio.

The vast majority of people who have invested in property have done so by purchasing a house or a condo to rent out. This is a fine way to generate some extra income while also gaining equity, but this approach is limited. The best way to cash in on investing in property is by entering the commercial market. In particular, the office space market is a great place to put your money.

Income potential

Office space rentals can offer a great monthly cash flow as the return on investment from renting out office space can be around 10%, and can get as high as 12%. These figures are much better than renting to a family or to students, which can typically earn no more than 4%. In addition, with commercial office space rentals, lease lengths are typically much longer than residential ones. Commercial real estate leases are commonly ten years or more, meaning more certainty in your income.

Business hours

Landlords for residential properties have to be on call at all hours of the day and night. If a repair is needed, or there is any other issue with the property, it is the landlord’s job to get it fixed. When renting out a residential property, that call could come at any time – even in the middle of the night. With offices, instances like these will generally occur on the premises during regular business hours and it’s much less likely that you’ll have to deal with a late-night call about the heating not working. As a bonus, it’s generally in the best interests of the business to keep their offices well-maintained and clean meaning you can worry less about damage and other problems than you might with a residential rental.

Appreciation

Many times, the value of a commercial property can rise as time goes on. This happens especially in cities where the development around the building is more likely to be stable. Location is key for this. For example, in London, a location like the office space in Monument is a good bet to keep gaining in value as time goes on.

Convenience

If your own business needs to open another office, or you’re starting a new one, having office space already at hand or being familiar with the marketplace can be much less stressful than starting from scratch. Leases can always be renegotiated if need be, and owning the property on which you run your business can have great benefits as well.

There is a myriad of reasons why investing in rental office space property might be the best choice for you. While there is a substantial initial investment, diversifying your realty portfolio can be very profitable which makes it an option that’s definitely worth looking into.