Before you feel too sorry for me, know that there's something really cool in some commercial properties called triple net leasing. It means that the tenants pay rent, they pay property taxes, they pay insurance, and they pay repairs. Nothing comes out of your pockets except your loan payment. Compare this to having a rental house, where tenants pay you rent and you pay everything else.
But wait, I'm talking about scary things. And that's when you have vacancy. Commercial properties aren't like rental homes, where you can feel pretty good about finding a tenant in a few weeks. It can be 6 months to a year before finding a commercial tenant that moves in. You’re used to that nice income, then all of a sudden you're paying a heavy mortgage payment, insurance, and taxes. If you don't keep a good chunk of reserves, then when a tenant moves out or stops paying rent, it can be game over for you.
I want to make sure there are no real estate game overs in your future. If you have a real estate decision coming up, ping me and let's chat.
