At almost 48 years by age I am a late entrant to real estate business but I have learnt a lot from my recent two years exposure.
New entrants (yours truly inclusive) always start with residential property (whether land, house etc). But the truth is commercial propertties bring superior returns than residential properties in whatever perspective you look ie that is capital gains from re-sale value or rental income from developed property.
Even if you are building a block of commercial shops, it will cost you less to accomplish this since you require no much space and less facilities like lounch, rest rooms, kitchen etc
but the returns in rent is superb provided it is in a PRIME LOCATION. Fully build shop and commercial property offered for sale are always prohibitively high (buying or renting). In most prime areas they sell per square feet or per square meters.
Even Mama Ngina knows shop space is far more expensive than residential space. No wonder in some cities some residential buildings are converted to commercial buidings and their new rental values are always sky high. Approval has to be sort though from town planning authorities to fulfil all righteousness.
The main constraint of commercial property is the cost outlay, genuine strategic land is far more expensive, completed commercial property even if sold singly are always expensive, but if one can afford it it, it is the best way to go
A richer friend of mine in late 2006 bought four shops each of dimension 9m2 and costing 5,000 naira(my local currency) per square meter
this complex was build by govt in conjunction with private investors, At the moment the resale vale of each lock up shop is 40,000 naira per square meter and the rental value is 4,500 naira per square meter !!!. Call it super return of investment or in stocks terms P?E of 4 ?
In real estate if you have the funds and the opportunity, whether buying to resale or renting for income, commercial property is the way to go.
My thoughts.
Young
Nigeria
The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .