What You Need To Know About Commercial Real Estate Investments
Posted on: 21 July 2022
Investing is a great way to grow your money and secure your future. Real estate is one of the most popular investment opportunities. If you are interested in real estate, but you aren't sure if residential or commercial is right for you, check out everything you need to know about commercial real estate investments.
What Is Residential Realty vs. Commercial Realty?
Residential realty involves property that is solely used to live on. It typically includes single-family dwellings like houses, but it may also include multi-family dwellings like apartments. In addition, duplexes, and co-ops are considered residential realty.
Commercial realty is used for business-related purposes. This includes office space, retail, hotel, etc. Depending on the local laws, multi-family dwellings and vacant land may fall under commercial realty it can be developed.
What Are the Advantages of Commercial Realty?
Investing in commercial realty typically costs more than investing in residential real estate, but there are also many advantages of investing in commercial realty. Many of these advantages allow you to make more money in the long run than compared to residential realty investing. It's also easier to ensure a business will be able to pay rent because you can look at their past financial records.
One of the leading benefits of commercial realty is that you can choose a triple net lease. This allows you to only pay the mortgage. The lessee pays for the real estate taxes and similar costs. Another huge benefit is that the business owner is likely to maintain the store to keep attracting customers and compete with competitors.
Are There Special Considerations?
Before you invest in commercial realty, start by checking local zoning laws. These laws determine where you can build and rent a commercial building. Zoning includes residential, commercial, industrial, agricultural, rural, and historic divisions. However, some areas may allow for combination zoning, which allows for multiple types of zoning in one area.
There are other laws to consider. Some areas, for example, may prevent you from renting certain businesses if they are too close to similar businesses. As the building owner, you could be held partially responsible. In addition, there is a higher risk of personal injury as you will have lots of people on the property.
Commercial realty may provide a bigger risk, but it is also a great way to make money in the long run. For this reason, commercial realty is a great investment opportunity. If you would like to know more, contact a commercial real estate agency such as RE/MAX Commercial Investment Realty in your area today.
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