Investing in Commercial real estate tends to be the better investment in comparison with investing in residential real estate. While both sectors can be great investment vehicles and greatly impact your net worth, residential real estate often receives the most attention as an investment option. Although, residential real estate may be the most feasible investment vehicle for most people, investing in commercial real estate add a multitude of additional benefits that are not offered through residential real estate investing.
Here are the 3 reasons why it is smarter to invest in commercial real estate than in residential real estate:
Access to Greater Capital
To a certain degree, it is harder to acquire $150,000 for a residential real estate deal than to raise major capital (under $3M) for a commercial real estate transaction. Why is that? In residential real estate deals, sources of funding are often limited to that of private money, hard money lenders, and traditional financing. If funding from any of these avenues is not available for any reason, an investor would need to acquire funding through a creative avenue via owner financing, lease options, subject to strategies, etc. While not a bad thing in itself, there are simply some real estate deals that cannot be funded with these kinds of creative funding techniques.

