Advantages & Disadvantages of Office Buildings
When most people think about commercial real estate, apartments usually come to mind first. But office buildings bring a whole new set of opportunities — and challenges. In this lesson, Doc Haller shares the key advantages of investing in office buildings, and later in the video, he explores the disadvantages you’ll want to weigh carefully before you buy.
Key Advantages of Office Buildings
- Professional Business Environment
Office tenants are businesses. They lease space because they need a professional place to run their operations — which typically makes them more stable and committed compared to residential tenants. - Triple Net (NNN) Leases
Perhaps the greatest advantage: tenants pay their proportional share of property taxes, insurance, maintenance, repairs, and utilities. This leaves the investor with nearly pure income, unlike apartments where the landlord absorbs these costs. - Pure Net Income
Because expenses are covered by tenants, your income flows through without being eroded by operating costs. Major repairs may still be your responsibility, but the day-to-day expenses are not. - Capital Appreciation
As office rents rise (and they’re at lifetime highs in many markets), property values rise too. That means you’re building wealth over time as your building appreciates. - Multi-Tenant Economic Value & Equity Buildup
With multiple tenants under one roof, each paying their share of expenses and rent, you’re leveraging other people’s money. You can bill tenants quarterly in advance for taxes, insurance, and maintenance — operating with their funds in hand.
That’s just the start. Doc goes on to explain additional advantages — and the potential disadvantages you must know about before investing in office buildings. Watch the full video above to get the complete picture.
Want to go beyond apartments and learn how to invest in office buildings, retail, industrial, and more? Doc Haller walks you through each step in the Commercial Real Estate Class.
