Commercial properties are the properties that are leased out to workplaces. Commercial Real Estate includes strip malls, shops, restaurants and office buildings. In most of the cases properties are generally sold by the nature of the property – one restaurant, one office building, one factory etc. To expand a project, if any developer wants more capital or wants to see quicker returns, the project will be broken down into smaller units rather than selling the entire building at once.
Advantages of Commercial Real Estate
The advantages from this particular investment are many and they are huge. One of the most attractive advantages is the leasing rates. There are many places where the total amount of new construction is limited because of either land or law. In that case commercial real estate can provide huge monthly cash flow and impressive returns.
Rental rates are generally calculated depending on the price per square foot. That is why the rental of any commercial building can vary from one place to another. The rate of industrial building is quite low. Whereas, when compared to an office tower, industrial buildings have lower overhead costs. Commercial Real Estate can also have an edge due to the longer lease contracts that can be made with its tenants. Where residential lease lasts for a short-term period, commercial leases can be for 10 years or more.
Who should go for Commercial Real Estate?
Commercial Real Estate is the proper place to invest for the people who have knowledge about the industry or have manpower who are aware of the same. A wide range of commercial properties are available at good rates. But one has to make sure that one is able to handle costs and the time required for an investment in Commercial Real Estate to give returns. You should go for it if you own a business. It can really be beneficial for you to own your workplace rather than taking it on rent. So go for it with a careful eye.