Anyone invest in an Office Building?

[I Find This Humerus]

Thinking about buying an office building with about 6 offices in it to rent out. Anyone try this before? Good or bad idea? I figure a business office is less hassle than a house rental in terms of not having to worry about tenants as much?

Seems like the current tenants are medical practices, law firm, etc.

 

Thoughts?

[HumbleInvestor]

I am interested and considered it for myself but did not find one yet. As you mentioned, if your tenants are medical and law, they will typically be good tenants. However if one of them leaves for whatever reason, filling that office is more difficult than say a residential space. If you look in to the market, you will find that there is available office space but not residential space. Whether the economy is good or bad, every one needs a place to live, but not every one needs an office space, so you will be working with a smaller market to start with. Good luck and share your journey if you pull the trigger.

[I Find This Humerus]

True but every business needs an office unless you are implying businesses will close.

[HumbleInvestor]

A declining economy forces more pop and mom stores to close and potentially slows down new business creation. More online business means less need for an office space near by. More DIY investing means, your neighborhood financial adviser does not need as big of an office space as he did before. So more existing space opens up increasing competition for your space. Nothing to be scared of but something to be considered. If the neighborhood population is growing then there will be more need for office space. If you are going to occupy a part of the space then you get favorable financing.

[I Find This Humerus]

HumbleInvestor wrote:

If you are going to occupy a part of the space then you get favorable financing.

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Can you elaborate on this please?

[HumbleInvestor]

Owner occupied commercial properties are not considered investment properties if the owner occupies atleast 50.1% of the space. Such properties have lower down payment requirements and may have favorable terms. Otherwise typical loans require closer to 30-35% down payment for investment properties.

[I Find This Humerus]

HumbleInvestor wrote:

Owner occupied commercial properties are not considered investment properties if the owner occupies atleast 50.1% of the space. Such properties have lower down payment requirements and may have favorable terms. Otherwise typical loans require closer to 30-35% down payment for investment properties.

Click to expand...

oh ok, ty

[Tim]

Office space has supply and demand too! The class and location of the building are critical for leasing transactions. Moving a business can be a major undertaking.

[FIREshrink]

Why is this better than a commercial REIT? It doesn't sound as if you have any experience owning or managing commercial real estate.