|
Thumb of Michigan | Seems like some think its an all or nothing deal- ag land vs commercial. Doesn't have to be, no rule anywhere that says you are locked into one class of real estate.
I own both. I own some commercial that I rent direct to the customer. I have a manager involved, I don't answer the phone or collect.
Most of my other commercial is NNN leased. 5 to 10 year leases. I've been through hurricanes and a tenant declaring bankruptcy. The hurricane was a bigger problem than the bankruptcy was, but that was a high profit store for the bankrupt lessee. They had to have it to come out of bankruptcy, some of the less profitable stores they leased had to give rent concessions.
The rent is a little less on a NNN property, but myself and the other owners have very little expense outside of principal (and if relevant) interest to carry the property. The lessee is paying the taxes, the maintenance, and the insurance.
I own no real residential real estate. Used to. Got an education, glad I got it young. I know it works for a lot of people. I'm not one of them.
This isn't a real profound concept, and one I sure didn't invent- but historically, painting with a real wide paint brush, ag land and commercial property tend to trend in opposite directions price wise. Not always, but a lot of the time. I sold some ag land quite a few years ago to buy some commercial land, and it worked fine. The ag land had appreciated very well, but at that same time commercial property was depressed That may reverse, and when it does, I plan on being back in ag land again.
The old rule about real estate is still true and always will be I suppose. That is simply- you make your money when you buy it, not when you sell it.
Which is a long way around to what the OP asked. My answer is - don't know. Don't care either. To a point anyway. If its farmland we're discussing, just rent the farm out on shares. Or some variation of that. When we rented farm land, most of the land was rented on shares. Landlord shares in the upside. Shares on the downside too. That downside potential is the part that doesn't work for a variety of reasons for some landlords. Still doesn't totally answer the question, but I don't know how to get consistently closer to whatever the "right" answer is.
Edited by pat-michigan 1/3/2025 04:28
| |
|
Cash rent vs commercial properties
