Why Commercial Real Estate is Important

Mazen Alzoubi - Why Commercial Real Estate Is Important

Commercial real estate is an interesting business to be in. There's a lot of competition and finding the balance between growing too fast and taking the time to do things right can be challenging. The commercial real estate industry really impacts many other industries, so it's important that you understand the basics before getting started.

What Does Commercial Real Estate Mean?

Commercial real estate is real estate that's designed to be used for commercial purposes, like retail stores or office buildings. Unlike residential real estate, it doesn't usually include any land. As a result, these properties are rarely sold "as-is." The business' fixtures and furniture are usually included in the sale and can be removed if you need to sell to someone else later. It also means the property may not have a yard or garden that you have to maintain.Commercial real estate purchases tend to be larger than the average residential purchase (because they're intended for a business) and much smaller in number than residential properties that are sold repeatedly over time. Because of this, many investors like commercial properties because they can be more valuable and easier to manage as you scale your business, too.Where Can I Find Commercial Real Estate?Commercial real estate can include: · Shopping centers · Office buildings · Factories · Restaurants· Warehouses· Mobile homes · Hotels · Gas stations But you can also find commercial real estate in rural areas, too. In fact, you can even purchase property that's zoned for a certain industry and then start your own business on it. For example, if you were an entrepreneur who opened a specialty ice cream shop and started purchasing other retail locations in your area, you could grow into a commercial real estate magnate of sorts.

Advantages of Owning Commercial Real Estate

There are many advantages to owning commercial real estate. One of the main advantages is that it provides a diversified portfolio for your wealth. Another advantage is that you can use building equity as collateral for a loan or investment. Another advantage includes being able to sell your property at any time and make money from it.

Disadvantages of Owning Commercial Real Estate. One disadvantage of owning commercial real estate is that it requires a large amount of upfront money before you can begin to earn money from the property. Another disadvantage is that it is hard to manage the property and keep track of the expenses involved with owning commercial property. It also takes a lot of time to manage the rental income from your commercial property, which may leave less time for other income generating activities.

All in all both investments carry different advantages and disadvantages, but both can be great investments for you. The smart investor will look at both the pros and cons of each type of investment before making a decision on which to pursue.

When buying commercial property or renting out commercial property, it is important to consider the size of the properties you are looking at. Having an idea as to how many units (commercial real estate) you will be able to rent out is important when determining if the property is worth it or not.

The Difference Between Commercial and Residential

Residential properties are used to live in while commercial properties are often used as offices, restaurants, and stores. Commercial properties can have tenants that come and go on a regular basis and can have lower rents than residential properties. The taxes for commercial properties are also typically higher than residential because of the services provided. Commercial properties are more likely to be subject to condemnation and eminent domain than residential ones.

The Difference Between Residential and Industrial. Residential properties are typically single-family homes, duplexes, and condos, while industrial properties include warehouses, factories, and retail stores. The taxes for the two types of property can vary tremendously because residential is often providing more services for less tax revenue. This means that residential property owners will have lower taxes but will also have higher insurance premiums because they are connected to a larger network of utilities. Also, the value of residential property changes more frequently than industrial property. The Different Types of Property Taxes. There are two types of property taxes: ad valorem and excise.Ad Valorem Property Tax. Ad valorem means “according to the value” in Latin, which is why this tax is based on the worth of your home or business. This type of tax applies to all properties, including residential and commercial ones, but it is generally higher for businesses than for homes. How to Choose Between City, County, and State Property Taxes. The primary purpose of a property tax is to raise money for local governments in order to pay for public services such as police, fire and emergency medical services, road maintenance, schools, parks and airports.

Other Ways to Invest in Commercial Real Estate

Real estate that is commercial is not limited to residential properties. You can invest in these properties as well. For example, you can purchase properties such as office buildings, warehouses, retail centers, and more. There are some restrictions with this type of investment but these are not as restrictive as they are for residential real estate. Commercial real estate also tends to have lower risks than residential property because the rates for vacancy rates and foreclosures are much lower. Real Estate Investment Trusts. This is another way to dip your toe into the commercial real estate market. Real estate investment trusts are entities that will include residential and commercial properties in one bundle. An advantage of using REITs is that you do not have to purchase a property and take on all the responsibilities with it because these trusts will deal with everything for you. You also get exposure to this market without having to deal with the headaches of management and upkeep. The major drawback of REIT s is that many do not focus on the lower end of the market, so if you want to get into this market, you will have a hard time doing so. Using REITs is worth considering if you are more interested in getting your foot in the door than maximizing your returns on rental income. Equity Crowdfunding. If you don’t want to take out a loan and deal with landlords, but still want to invest in some properties, consider crowdfunding sites that allow you to buy a share of a property. For example, Groundfloor allows you to buy into properties that are a part of their private lending program. This means you aren’t actually buying the property, but rather investing in someone else’s loan and earning interest on it. You can get started with as little as $1,000 and earn interest between 7-18% depending on the type of loan.

People can invest varying amounts from as little as $100 or up to $10 ,000. When it comes to rental properties, the same rules apply as any other investment — you don’t want to overpay, but also don’t want to pay too little.

The Importance of Commercial Real Estate in the Economy

Commercial real estate has become a strong force in the economy. It has to do with the way that commercial buildings are built. You see, new skyscraper offices or stores usually replace old buildings--which don't have as much demand. This makes certain areas of town very popular, but others less so. We can see this by looking at development trends in Singapore and Hong Kong, for example.

Conclusion

The point of the blog is to show how commercial real estate is important, and it does a great job of doing that. The post has many bullet points that show what commercial real estate does for other businesses, including providing much-needed infrastructure and technology support. It also shows how commercial real estate can improve the community by creating jobs, boosting employment rates, and even improving quality of life. Finally, the post discusses how commercial real estate can improve the environment by investing in green buildings and developing sustainable communities - Mazen Alzoubi

 

More From Mazen Alzoubi

Mazen Alzoubi - Real Estate Blockchain

Mazen Alzoubi - Blockchain and Realestate 

Mazen Alzoubi - Real Estate Tokenization

Mazen Alzoubi - 11 Blockchain Real Estate Companies

Mazen Alzoubi - NFT and the Real Estate Industry

Mazen Alzoubi - Real Estate Tokenization Strategy