An In-Depth Guide To Understanding Everything About Commercial Real Estate
The world of business has been developing since medieval times. People are looking for ways to increase their wealth every day. Still, the majority prefer investments that give them passive income or protect their nest egg. So, it goes without saying, that real estate is one of the industries known to do just that.
On this note, the real estate industry is split into two broader categories. These include residential real estate property and commercial real estate. As for the latter, this means investing in properties whose sole purpose is business rather than housing or living. Unlike personal space, the use of commercial buildings or real estate units is typically to generate income. These may range from retail to office space, and room for other businesses such as hotels, healthcare facilities, warehouses, mall stores, and the like. To understand more about commercial real estate, we need to look at the common types of commercial properties as highlighted in this piece.
Types of Commercial Real Estate Properties
The categorization of these properties depends largely on the different business functions they serve. If you take a look at the Comelli Commercial website, you will come across a diverse range of commercial real estate properties for sale. You will also note that in most cases, these properties are sold or bought as businesses. All the same, some of the common types of commercial properties include the following.
This is a property that has multiple units within the same structure. An example would be an apartment building. Someone might ask, isn’t that supposed to be a residential building? That would be so if the building had less than 5 units. Or, the owner may have bought the building as their own home but later decided to turn it into a source of income. If the building has more than 5 units, then the owner had bought it primarily to generate income not to live in it, making it a commercial property.
2. Office Space
These are buildings built purposely to provide cubicles, conference rooms, reception areas, or any other office-space. In most cases, companies rent these office spaces for long-term use as they do not wish to move their workforce around continuously. When renting office space, one considers several factors. This includes the size of their team, their kind of business, and so forth. These buildings are further classified depending on the integration of features and facilities.
This is something that ranges from a mall to a large shopping center or entertainment center in the neighborhood. This type of property is usually more expensive than an office due to the need for constant maintenance from the high foot traffic. The property is also usually a long-term lease and could range from 5 to 10 years. The price of these properties may also vary depending on the anchor tenants in the same area. With a big brand name around, it is expected that the foot traffic in the area will be higher. Therefore the prices will likely be higher than normal. The marketability of these properties also depends on the same.
These properties mainly consist of buildings such as warehouses and other types that facilitate operations such as manufacturing and distribution. Due to the nature of the intended use, they are located away from residential areas or urban areas. They are also under strict zoning regulations that they must strictly adhere to.
A Word on Selling Commercial Real Estate
A real estate business is essentially an entity that deals with buying, selling as well as the management of real estate properties. The selling of commercial real estate isn’t any different from residential properties. They both require agents who have gone through training and have a license. Licensing exams are done state-by-state. The residential agents will be dealing with individuals or small families looking for a good home while the commercial real estate agents will be dealing with investors and business people (some agents may decide to do both). In most cases, however, agents who intend to work in commercial real estate start with residential property.
Commercial real estate clients come in two types; those looking for a place to start their businesses and those looking to buy a property. An agent may decide to work with the investors only or the business people only or even both. As a client, you should know who to approach depending on your needs.
While this career might be promising, it is important to keep in mind that like any other venture, this one will as well come with its setbacks. In many places, for instance, the market is constantly changing, and competition is on the rise each day. Your effort to market yourself using effective strategies is what will make the difference. Nonetheless, it can be quite rewarding, especially if you are well informed or trained.