Hi there, thanks for reading this. I'm not sure what you'd call the specific structure of the deal or I'd Google it, but either way the insights of this subreddit are always appreciated.

Anyway, the deal is for a piece of commercial property. It's already rented to a secure tenant at a set rate for the first five years, then increases by 10% once for years 6-10, and they have the option to renew for two five year terms. The ROI is around 6% assuming there's no debt involved (and I'd probably need a loan for this), which is okay but not great. Given the continued risk of inflation, I'd think this would be something to avoid, but the secure tenant does make it appealing. More importantly, the location is basically unmatched in this area for this kind of client. Even if they wanted to move, they wouldn't be able to find a spot as nice for what they are doing. I've lived in this area for years, so this isn't just me speculating on some area I've read about once.

What are your thoughts on this? Do you invest in commercial property or do you stick with residential? Commercial seems to me to be lower risk, lower return but I'm new to this (I only have one SFH so far) so any insights are appreciated.