If you are ready to take the plunge into real estate investment, you may be wondering whether to start with residential or commercial properties. Perhaps you already own a residential investment and wonder about the benefits of adding commercial real estate to your portfolio.

You may already know how much variety there is in the commercial property world, and that makes it a smart way to invest. If you are considering branching out beyond residential ownership, you will want to begin by gaining as much information as possible about your options.

Property options

When you own commercial property, you are dealing with business owners as tenants. Your leases will typically be longer, and your tenants, who know that location is important to keeping a customer base, will be more stable. If you are investigating properties in New York, you have many varieties to choose from, and some of these require little involvement after your initial financial investment.

For example, in addition to office buildings and retail space, you may consider purchasing a coin-operated building, such as a car wash or laundry facility. These are especially attractive to those who have mechanical skills. Other popular turnkey investments in commercial real estate are storage unit buildings, which come in many sizes and carry minimal maintenance costs.

Purchasing a large, open building that allows you to alter the space for each new tenant provides enormous flexibility. Warehouse buildings are ideal for gyms, entertainment venues and technology startups.

Investment options

You may have the desire to purchase a commercial property, but funding the purchase is often a sticking point. To circumvent this, you may explore co-investing, where you share the expense and the profits with one or more other investors. This may require a carefully drafted agreement spelling out the responsibilities of each investor.

Real estate investment trusts take this idea even further. This is a truly passive investment because you purchase your share in the investment from a specialized REIT company that owns and manages the property. Along with the other investors, you then earn a return if the investment is profitable. This may be a good way to begin your venture into commercial property

Taking a leap into commercial property means dealing with the many state, federal and regional laws related to your investment. Like many others who find success in commercial real estate, with assistance from a legal professional, you may find your new venture can be profitable.