Commercial real estate refers to properties used for business purposes, such as office buildings, retail stores, warehouses and hotels 💼

Investing in commercial real estate works similarly to residential, except you typically don’t live in the property.

Instead you buy a property and become the landlord, renting it out to business tenants 🔑

Commercial leases are typically longer than residential leases, often lasting 5-10 years or more ⌛

In other words, when you rent it out, people typically commit to stay for longer!

This can provide more stable, predictable rental income compared to short-term residential leases 📅

Commercial real estate can also offer higher rental yields – which is annual rent divided by property value – than residential properties 💰

However, the upfront costs of investing in commercial real estate are usually much higher than those for residential real estate, and it requires more specialized knowledge 💸

Many investors get started in commercial real estate through investing in REITs 👥

Notable commercial REITs include American Tower (cell towers) and Prologis (warehouses) ⬆️