Commercial real estate generally refers to properties used for purposes other than housing single-family residential occupants. Within this broad phrase, however, there are many different types of commercial realty. Let us look at the various commercial buildings and their contrasting qualities to see how they might affect your role as a real estate investor.
Multifamily properties are units that house residential tenants. Industry professionals consider property as commercial if it contains five or more units, while one with four or fewer units is named residential. Commercial multifamily properties usually have stricter lending guidelines than their residential counterparts and often require higher down payments between 25% and 30%. These requirements are often the case, even if the owner plans to live in one of the units.
Multifamily properties have many subclasses, including:
Similar to multifamily properties, commercial office spaces are characterized by low-, mid-, or high-rise, based on the building’s construction and design. These types are placed into one of three classification categories: A, B, or C.
Industrial properties vary significantly in terms of size and usage. Nearly every industry interacts with industrial, commercial real estate at some point in the supply chain, as warehouses are often the starting point in buyers’ journeys.
Industrial real estate has several subcategories:
Brick-and-mortar businesses are still vital to our economy, despite the ever-increasing surge in online purchasing. The following are a few types of retail buildings that are a part of many individual’s day-to-day errands:
Hotels are a prominent kind of commercial real estate that can be found in any location. However, there are several different subsets of this property type:
Mixed-use commercial real estate can come in many forms, usually utilizing any of the properties mentioned above within the space. It is common for mixed-use land to offer a combination of residential real estate atop retail, restaurant, or office properties.
Before you become an investor, it is essential to speak to professionals within a commercial real estate agency. They will help guide you through the process, so you make the best investment possible for your situation. Always consider what type of property you want to invest in, how much money you have to put down, and what kind of maintenance and care your space will require.
After all, you want your commercial real estate investment to work in your favor. To understand even further, seek information from an agency that offers commercial real estate services to help you find the best opportunity for your unique needs.
Rakow Realty is a full-service commercial real estate agency representing tenants, buyers, owners, and sellers for more than 30 years. Rakow’s commercial real estate services are in place to best serve New York, New Jersey, and Connecticut’s resident’s real estate needs. From leasing to buying, Rakow Realty protects their clients’ interests every step of the way.
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