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What is Commercial Real Estate?

Commercial Real Estate Defined

Property that has the potential to accumulate profit via rental income or capital gain is known as commercial real estate. Commercial property can be anything from a residential duplex to an office building, or even a warehouse or restaurant. If you can make a profit from leasing or renting the building out and then reselling it, it is known as a commercial property.

Investing in Commercial Property vs. Residential Property

Whether you are investing in commercial real estate Daytona Beach-based, or investing in residential property, you need to know the difference. Commercial properties typically require a bigger investment upfront than a residential property. Additionally, the rate of return is normally higher also. There are various net leases that you can take advantage of, which means that the tenant leasing the property will be responsible for real estate taxes, insurance, and maintenance.

Commercial real estate doesn’t allow you to physically live on the property, unlike residential real estate. However, the good thing about commercial real estate is that you have the ability to work with business owners or work with renters directly. Unlike residential property, business property tenants are more likely to stick to their lease terms and pay their rent as they should.

Types of Commercial Real Estate

There are also various types of commercial real estate including:

  • Offices- Offices typically fall into two categories, including suburban or urban. Urban buildings are found in cities and include high-rise properties, while suburban office buildings are located in smaller towns and many times grouped in office parks.
  • Retail- Retail properties consist of restaurants and retailers that you may frequent every day.
  • Industrial- These buildings house industrial operations for many tenants that are located outside of urban areas, including transportation routes. They can include light assembly, heavy manufacturing, bulk warehouse, and flex industrial.

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