Paul Sternberg of Houston Reveals Benefits of Both Commercial and Residential Real Estate

Paul Sternberg

Those new to the world of property investment are often torn between the benefits of either commercial or residential real estate.

That's according to Paul Sternberg of Houston, TX, an experienced real estate investor, entrepreneur, and businessman. "People often ask me, should they invest in commercial or residential real estate?" says Sternberg. "The truth is that there are positive and negative aspects to both, as is the case with almost any form of investment."

Sternberg reveals that both sides have their benefits. "For example," he explains, "residential properties are often less costly, both to purchase and to renovate. Similarly, property taxes are usually much lower on residential rather than commercial properties."

The truth is that there are positive and negative aspects to both, as is the case with almost any form of investment.

Paul Sternberg, Experienced real estate investor, entrepreneur, and businessman

Houston-based Paul Sternberg is also keen to highlight the benefits of the commercial real estate, pointing out that commercial leases typically have fewer restrictions and legal requirements than their residential counterparts. Even Common Area Maintenance is billed back to the tenant. "What's more, commercial sites will invariably attract much higher rates, although this is of course reflected in higher initial purchase costs," he adds.

So, what of the negatives? "Again, both propositions do admittedly have their downsides, although it's about weighing up exactly what you want from your investment, and how much work you plan to put in," suggests Sternberg. "Further to the increased costs associated with commercial real estate investment, there's often much more paperwork to handle too."

Of residential properties, Sternberg emphasizes again that while any paperwork is likely to be more straightforward, there's a greater duty of care toward tenants. "You're also much more likely to get out-of-hours calls from residential tenants than with commercial," he adds.

Given the choice of both commercial and residential properties, in an ideal world, what would Paul Sternberg choose, or suggest to aspiring real estate investors? "Commercial, no doubt about it," says the seasoned investor.

Clarifying his reasoning, Sternberg points out that commercial properties and tenants are usually more sophisticated and often less demanding than with residential properties. "Along similar lines, smaller apartments tend to be less problematic than larger family properties," he suggests.

"Often, however," Sternberg continues, "the difference between solid and not-so-solid real estate investments comes down to location and demand, rather than simply the commercial or residential nature of the property or premises."

"My advice," adds the Houston native, wrapping up, "would be to carefully research demand locally, for both residential and commercial real estate, making sure that any potential purchase will offer an adequate return on investment, especially in the long term."

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Source: Paul Sternberg

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