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Commercial Real Estate Investing: How to Generate Passive Income

Commercial real estate investing is a smart way to generate passive income. There are many different types of commercial real estate — some may require a bigger investment, while others may be more time-consuming. Meanwhile, there are endless ways to generate passive income, but they are not all lucrative.

MY SALON Suite offers entrepreneurs the opportunity to invest in commercial real estate and generate income with a minimal time commitment. By owning a suite of salons, franchise partners provide the space and tools stylists need to run their own businesses. MY SALON Suite franchise owners generate income by renting out salon space to experienced beauty professionals. This is one form of commercial real estate investing that renders successful results.

Here is everything you need to know to start using commercial real estate investing to generate passive income.

What is Passive Income?

Passive income is money that does not require much or any daily effort to earn and maintain. Some examples include stocks, renting out property, or selling ad space in a blog. Some forms of passive income, like the latter example, may take time to build and establish. The goal is to set up a steady stream of income that you can maintain without much effort in the long run.

Benefits of Passive Income

The benefits of passive income may seem obvious — earn money by putting forth minimal effort! But the benefits go far beyond putting extra money in your bank account. Financial expert Chris Hogan lists some of the major benefits of building a passive income on DaveRamsey.com:

  • Increase your wealth-building plan
  • Create an opportunity to retire early
  • Protect you from a complete loss of income if you lose your job
  • Provide an additional source of income when you’re no longer able to work or if you outlive your retirement fund

Ways to Earn Passive Income

Keep in mind that if it seems too good to be true, it probably is. Get-rich-quick schemes are not wise ways to earn passive income. You may need to work hard and do a hefty amount of research to establish your form of passive income, but that effort can lead to success down the road.

Hogan also lists various ways to build passive income:

  • Start a blog/YouTube channel – Share your brilliant ideas or expertise online! If you gain an audience and build enough daily traffic, you could sell ad space.
  • Sell digital products – These could include an e-book on up to a complex app that generates income for years after it is released.
  • Store people’s stuff – You can think big and buy a storage facility, or you can rent storage in your own basement or shed.
  • Rent out useful items – Think about items or spaces you have but don’t need to use all the time: like a truck, a trailer, or your yard. This also includes renting out spare rooms in your house with a website like Airbnb.
  • Real estate – Rental property can be a great source of extra income, whether it’s residential or commercial. Both require more work up front, but commercial real estate may require less daily effort on your part in the long run.

Commercial Real Estate Investing

Commercial real estate investing is a great way to generate passive income. Commercial real estate is property used for business. This does not include room rental in your home, but it could include a multi-family apartment building.

Types of Commercial Real Estate

There are several types of commercial real estate. JD Esajian, president of multi-million dollar real estate investing company CT Homes LLC, describes the different types of commercial real estate on fortunebuilders.com:

  • Office – This is the most common type of commercial real estate. These buildings range from single-tenant offices to skyscrapers.
  • Retail – Another popular commercial real estate type is retail buildings. These can include strip malls, community retail centers, banks, or restaurants.
  • Industrial – Industrial buildings are typically geared towards manufacturing industries, and they offer spaces with height specifications and docking availability.
  • Multi-family – Apartment complexes, high-rise condominium units, and smaller multi-family apartment buildings make up another popular form of commercial real estate.
  • Special purpose – Special purpose properties are designed for a specific use, like car washes, storage facilities, or school buildings.

Benefits of Commercial Real Estate Investing

Investing in commercial real estate can be fortuitous, and the rewards are endless. Esajian lists the following benefits of commercial real estate investing:

  • Higher income – Commercial properties tend to have a better return on investment than single-family properties. Commercial real estate also provides a lower vacancy risk, and leases are generally longer than those with residential real estate.
  • Cash flow – Commercial real estate usually offers a consistent stream of income due to longer lease periods.
  • Less competition – The commercial space tends to be less saturated with other investors.
  • Longer leases – Lease agreements for commercial properties are usually signed for multiple years.
  • Business relationships – You may be able to build relationships with the business owners renting in your building, and this can help expand your network.
  • Limited operational hours – With residential real estate, there is always the chance a tenant can call you at 2 a.m. to fix a broken toilet. That is less likely to happen with commercial real estate. You will usually share the same working hours as your tenants.

Investing in MY SALON Suite

MY SALON Suite franchise partners receive all the benefits of commercial real estate investing, and they can generate a passive income.

The salon suite model works by renting out space to professional stylists who are eager to own their own businesses. MY SALON Suite provides the space and the tools for them to be successful salon owners. As a MY SALON Suite franchise partner, you collect rent from tenants and maintain the commercial property. All of this is done with the support and guidance from MY SALON Suite.

Most MY SALON Suite franchise owners work about 5 to 10 hours a week. They receive training and assistance to get their location up and running, which is often the most difficult aspect of establishing passive income. Once the location is established, franchise owners must attract and maintain stylists. That’s it! It’s the same as a commercial real estate investor trying to maintain renters, but with the backing of a successful brand and experienced team.

Commercial Real Estate Investing with MY SALON Suite

Are you ready to begin your commercial real estate journey? Contact us to learn more about MY SALON Suite ownership.