Commercial and Investment Properties
Property can be more than just a place you live it can become a way to generate income. As an investor there is a wide variety to invest in real estate. Commercial properties are defined as land or buildings that are zoned for and intended for the generation of profit. There is a broad range of properties that fall into this category which ranges from residential rental units all the way up to large industrial complexes.
Residential rental units range from small duplex properties, or all the way up to large high rise type apartment buildings. Landlords experience a wide variety of challenges such as tenant issues, building maintenance and taxes but an ability to deal with issues and placate tenant can be a great way to generate regular income while building equity in a property. Obviously being able to provide housing for a number of tenants without having to maintain several properties has benefits such as reduced maintenance costs however issues regarding individual tenancies tend to increase as does the time commitment required to properly manage the property. Residential apartment complexes offer an affordable housing solution in densely populated areas for tenants.
Office buildings, including medical offices, are designed to accommodate various professional organizations in a convenient location. The professionals who lease office space in these buildings tend to provide related services to consumers. This benefits the professional, the consumer and the landlord.
The professional benefits from convenience realized by the consumers and may even save time and costs when contacting and referring consumers to another service that compliments the consumers needs. A good example of this type complimentary service is a physician’s office in the same building as the medical laboratory and an x-ray clinic.
The consumer benefits from the convenience of parking in one place and being able to accomplish a number of things all in one building. The example above regarding the medical clinic would allow the consumer to visit with the family physician, go to the medical laboratory for blood work and in some cases, return to the physician’s office for immediate follow up.
Of course the landlord benefits from this relationship by reaping the financial benefit of competitive rents and even income from parking fees. Consumers and professionals alike are often willing to pay a little extra in order to receive efficient service.
Gasoline stations often combine complementary services for consumers such as convenience stores, car washes, and even vehicle repair shops. Other larger stations, which are typically located along major roadways, include amenities for travellers such as restaurants, television lounges and even shower facilities. Owners benefit from the increased income from consumers who are often delighted that they are able to get the necessities that they require all in one place. Similar to the landlords of multi-plex and office buildings, owners of gas stations are able to benefit from the reduced maintenance costs in comparison to managing several different locations.
Restaurants tend to be located in areas which offer various services to consumers. A shopping plaza often houses an eating establishment of some sort in. Another example would be an area that caters to tourists and other visitors. Often times a hotel or motel will be nearby.
Shopping centres are commercial buildings that house a number of amenities for consumers. These centres typically contain a grocery store, a clothing store, an eating establishment, a financial institution, and in larger shopping centres an office section. Landlords benefit from long term leases and stable tenancies. Leases tend to be more complex than residential tenancies but the long term payoff can make owning a shopping centre very rewarding.
Hotels, motels and other accommodation properties are designed to generate a profit to the owners similar to those of residential multi-plex buildings. The primary difference being the shortened lease term. Most people do not realize this but they are actually entering into a short term lease agreement when staying at a hotel or motel even when it is only for one night. Owners of accommodation properties often provide a reduced rate for longer term stays as this reduces the expense of changing the room after daily lease terms.
Parking lots, in some market places, are clearly intended as profit centres. Large cities with limited parking have rather pricy pay per parking services. Often times these higher priced parking lots are located close to high traffic amenities such as shopping centers, theatres, and other attractions. The increased fees may be due to additional services provided by the parking lot owner such as security and valet services. Parking lots also benefit from low overhead due to the fact that there is not a structure to maintain and in some cases payment can be taken through an automated system.
Convenience stores, as mentioned above, are typically located in or nearby gasoline stations but are also in shopping centres and small communities or as a standalone business. As the name indicates these stores are designed to be convenient but also to generate a profit for the owner. They carry a wide variety of connivance items that consumers regularly seek which creates a regular income stream.
Industrial Buildings are best suited to business owners. These consist of warehouse space, manufacturing as well as wide variety properties suites to other industrial uses. These properties have meet zoning requirements allowing specific industrial uses. Industrial properties traditionally have features that are tailored to the business they house like, truck level loading docks, 3 phase electrical service, high ceilings, and specialized equipment. Industrial space is typically isolated from residential area and required multiple employees to operate and maintain the facility.
As you can see the classification of commercial and investment real estate
encompasses a wide range of properties. The most common uses of
commercial and investment properties
are office buildings, gas stations, restaurants, shopping centres, hotels and motels, parking lots and convenience stores. Residential multi-unit properties are a great entry level opportunity for new investors. But there is a commercial property that is ideal for all levels of investor. You can know more at
Chuck Harris is the founder of Agents Ranking; a Minnesota company that helps home buyers and sellers throughout Minnesota connect with the best real estate agent for their particular needs. Agents Ranking provides a unique consulting service free of charge to anyone who wants the best
possible. You can know more at