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1 year ago

Precisely What Is Commercial Real Estate

When I told my friends that I was now selling commercial real estate, some of them asked the question, "What is commercial real estate?" Most people know what residential real estate is - the buying and selling of homes, but you can find those who have some misunderstanding about what is included in the buying and selling of commercial properties. mobile homes for sale clayton

The first thing you want to know is what type of property can be named commercial real estate. The basic rule is: if you live in it, it is residential, otherwise it's commercial. To put it in economical terms, any building where commercial transactions take place is commercial real estate. However, the reality in the field is a lot more complicated than this. A building with three rooms and two bathrooms is definitely residential; a building that houses three shops is by all means, commercial. But how about a building which has five shops and five living apartments? Here's the catch: every building that has four or more commercial units is categorized as commercial real estate.

You may now be wondering why we separate out residential real estate from commercial real estate. The reason for this is, if the property is being purchased as a possible income producing property, then it is looked at differently than if it will be used as a personal resident. The reason for separation is because they each require some additional, specialized skills. For commercial real estate, an agent needs to be able to understand certain investment analyses, such as NOI (Net Operating Income), ROI (Rate of Return), CAP Rate (Capitalization Rate), and also be able to determine if the investment is profitable or not. The investment is not only based on the price of the property, it also includes profitability, whether or not the projected income will be greater than the projected expenses and exactly how long it will take to re-coup the investment.

If you buy a house with the only purpose to make money off it, you could file it under commercial real estate, even if it is not a shopping center, warehouse, manufacturing unit or rental apartment's complexes, which can be definitely commercial. It is important to classify a property because there are different rules that apply to each category. The most important one is the mortgage and the rules you need to comply when you have to qualify for this loan. When you ask for a personal mortgage the final reply is influenced by your income, while commercial mortgage depends on the income your property can produce. When it comes to taxes, there are also different rules and when you file for bankruptcy, commercial properties receive different treatment, in comparison with residential properties. Before you take the decision on investing in commercial real estate you have to know what benefits you can reap from this transaction.

1 year ago

What Exactly Is Commercial Real Estate

When I told my friends that I was now selling commercial real estate, some of them asked the question, "What is commercial real estate?" Most people know what residential real estate is - the buying and selling of homes, but you can find those who have some misunderstanding about what is included in the buying and selling of commercial properties. see our webpage

For the sake of this article, I am going to see how Investopedia.com defines commercial real estate. Investopedia.com says that commercial property is "Property that can be used solely for business purposes." This means that the property can be used as income producing; it is not to be used primarily as the buyer's resident. A few examples of commercial properties include: shopping centers, office buildings, retail buildings, multifamily properties (apartment buildings), vacant developable land, etc.

You may now be wondering why we separate out residential real estate from commercial real estate. The reason for this is, if the property is being purchased as a possible income producing property, then it is looked at differently than if it will be used as a personal resident. The reason for separation is because they each require some additional, specialized skills. For commercial real estate, an agent needs to be able to understand certain investment analyses, such as NOI (Net Operating Income), ROI (Rate of Return), CAP Rate (Capitalization Rate), and also be able to determine if the investment is profitable or not. The investment is not only based on the price of the property, it also includes profitability, whether or not the projected income will be greater than the projected expenses and exactly how long it will take to re-coup the investment.

If you buy a house with the only purpose to generate money off it, you can file it under commercial real estate, even if it is not a shopping center, warehouse, manufacturing unit or rental apartment's complexes, which can be definitely commercial. It is important to classify a property because there are different rules that apply to each category. The most important one is the mortgage and the rules you need to comply when you have to qualify for this loan. When you ask for a personal mortgage the final reply is influenced by your income, while commercial mortgage depends on the income your property can produce. When it comes to taxes, there are also different rules and when you file for bankruptcy, commercial properties receive different treatment, when compared with residential properties. Before you take the decision on investing in commercial real estate you have to know what benefits you can reap from this transaction.

1 year ago

Understanding Commercial Real Estate

When I told my friends that I was now selling commercial real estate, some of them asked the question, "What is commercial real estate?" Most people know what residential real estate is - the buying and selling of homes, but there are those who have some misunderstanding about what is included in the buying and selling of commercial properties. buy house clayton nc

The first thing you want to know is what kind of property can be named commercial real estate. The basic rule is: if you live in it, it is residential, otherwise it's commercial. To put it in economical terms, any building where commercial transactions take place is commercial real estate. However, the reality in the field is more complicated than this. A building with three rooms and two bathrooms is definitely residential; a building that houses three shops is by all means, commercial. But exactly how about a building which has five shops and five living apartments? Here's the catch: every building that has four or maybe more commercial units is categorized as commercial real estate.

You may now be wondering why we separate out residential real estate from commercial real estate. The reason for this is, if the property is being purchased as a possible income producing property, then it is looked at differently than whether it is going to be used as a personal resident. The reason for separation is because they each require some additional, specialized skills. For commercial real estate, an agent needs to be able to understand certain investment analyses, such as NOI (Net Operating Income), ROI (Rate of Return), CAP Rate (Capitalization Rate), and also be able to determine if the investment is profitable or not. The investment is not only based on the price of the property, it also includes profitability, whether or not the projected income will be greater than the projected expenses and exactly how long it will take to re-coup the investment.

Alright, I really could hear the question, "Why do we need to know all of this information about commercial real estate?" My answer to this question is; if you want to be that professional that the investor will be looking up to, then you need to be able to help him/her make the deal and feel good about the deal. Remember, without the deal, there is no payday. Additionally, you want that investor to come back to you when he/she wants to invest again and you also want them to provide you with referrals. Usually, you do not see very many commercial properties being advertised in the MLS. Primarily, the MLS has residential properties and commercial properties are advertised on sites such as Loopnet(dot)com and ShowCase(dot)com.

Making an investment in commercial real estate often requires a considerable amount of startup capital and extensive knowledge of the legal, financial and regulatory aspects of owning this type of property. Investors that do not would like to deal with these hassles directly can gain exposure to commercial real estate through real estate investment trusts (REITs).

1 year ago

What Exactly Is Commercial Real Estate

When I told my friends that I was now selling commercial real estate, some of them asked the question, "What is commercial real estate?" Most people know what residential real estate is - the buying and selling of homes, but there are actually those who have some misunderstanding about what is included in the buying and selling of commercial properties. see our site

The first thing you want to know is what sort of property can be named commercial real estate. The basic rule is: if you live in it, it is residential, otherwise it's commercial. To put it in economical terms, any building where commercial transactions take place is commercial real estate. However, the reality in the field is more complicated than this. A building with three rooms and two bathrooms is definitely residential; a building that houses three shops is by all means, commercial. But exactly how about a building which has five shops and five living apartments? Here's the catch: every building that has four or even more commercial units is categorized as commercial real estate.

The term "commercial real estate" is quite broad, so you might find out the apartments building you are living in is advertised as commercial real estate. This is because there is certainly a different way to classify these properties: by the amount of income they offer to their owner. If you own a duplex or another multi-family building you are the proud owner of commercial real estate, because the property brings you an income on a steady basis. This makes all rented buildings commercial buildings and there is a reason for that: if you buy a property with the purpose of turning it into a source of income, you are in fact buying commercial real estate, not residential. Another example of ambiguous commercial real estate is the houses occupied by elderly people. Their main purpose is to offer a shelter for elders, but the owner of the facility is earning money off the property. So, you will need to categorized it as commercial real estate, even if people live in it.

If you buy a house with the only purpose to generate money off it, you can actually file it under commercial real estate, even if it is not a shopping center, warehouse, manufacturing unit or rental apartment's complexes, which are definitely commercial. It is important to classify a property because there are different rules that apply to each category. The most important one is the mortgage and the rules you need to comply when you have to qualify for this loan. When you ask for a personal mortgage the final reply is influenced by your income, while commercial mortgage will depend on the income your property can produce. When it comes to taxes, there are also different rules and when you file for bankruptcy, commercial properties receive different treatment, in comparison with residential properties. Before you take the decision on investing in commercial real estate you have to know what benefits you can reap from this transaction.