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Key Benefits of Investing in Commercial Properties

Posted by IPS Commercial on May 17, 2022
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Should you invest in commercial properties?

Despite big economic changes over the last few years, investing in real estate remains to be the best thing you can do with your money. This is specifically the case with commercial properties rather than residential properties recently and in the coming years. While there may have been a property glut due to economic downturns, amid other properties, commercial properties quickly bounced back and are performing better than ever.

To make you a better informed investor, leading real estate company IPS Cambodia has curated a list of all the benefits in investing in commercial properties. Learn about them below.

Bigger profit margin

When talking about profitability, people immediately think about residential properties. This is true in some ways, but the expected profit margin of a commercial property, whether this is in the city center or not, is leaps and bounds higher. It’s also possible to get a return of your investment faster considering the number of businesses looking to rent their own office or building.

Above all that, if you make renovations within the building to include amenities like lounge area, gym and more, then this only increases your profit as well as your attractiveness to businesses.

CRE competitors are fewer

Considering most real estate investors focus on residential real estates, the number of investors in commercial real estate (CRE) are fewer. In this case, it would make it easier for you to find a building you’d like to invest in and market it for businesses.

High appreciation rates

CRE properties are guaranteed to only increase in value over time, especially if maintenance and renovations are done over the years. If you keep the building attractive for current and potential clients with the best amenities and if it’s in a great location bustling with business, then its value is only bound to increase.

Besides that, according to research conducted by realestate.com.kh, the price trend of CRE properties have only made significant increase since 2021. The average value of CRE in 2021 was $703,000 and in the first quarter of 2022, the current price average is already at $1,100,000.

Due to the current trajectory, it’s only predicted to increase in value in the following years, making this the best time for you to invest in a CRE property of your own.

Tax benefits

Keeping up with maintenance and renovations with commercial properties isn’t easy but thankfully there are tax benefits that can help lower expenses. As of writing, the capital gains tax in Cambodia that was set to be implemented in 2022 is postponed until 2024. This postponement is especially beneficial for businesses since the potential to recover from the economic downturn will be easier and faster due to this. 

More reliable clients

One of the best things about investing in commercial property, besides the profit, is that the clients you have are more reliable. Considering you’re leasing a unit or the entire building for their businesses, these clients are more than expected to act in a conscientious way that will uphold their business’ reputation as well. This means you are less likely to encounter problematic clients, making it easier for you! 



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