Commercial real estate refers to property that is purchased for business purposes instead of personal residential purposes. It has proven to be a good long-term investment because it offers high-income potential as well as significant tax benefits. There are generally many investment opportunities in the marketplace and there is a lot of assistance available to maintain and improve commercial properties.
Types of Commercial Real Estate
Commercial real estate includes industrial properties, warehouses, office buildings, self-storage facilities, retail properties of many types, strip malls, shopping centers, hotels, and multi-family housing. It also includes mixed-use properties such as a structure with retail shops on the ground level and residential real estate on the upper levels.
How to Generate Revenue with Commercial Real Estate
There are two primary ways to generate income with commercial real estate: rental income and value appreciation.
First, rental income can be generated by getting a property ready for occupancy as quickly as possible and then charging rent to its users. The amount of income generated will depend on the property landlord’s operating expenses including loan interest payments, rent collection, tenant management, property maintenance, and repairs. The higher the occupancy rate, the higher the rental rate based on the features of the property, and high-quality tenants will all contribute to a solid income flow. Income can also be generated by payments from raw land users.
Second, income can be generated from the long-term value appreciation of the property during the life of its ownership. That is a condition of the location, economic factors, which obviously can vary. As well as the improvements and value additions that the property owner makes.
Tips to Achieve Real Estate Investing Success
Understand the market including the economic and real estate drivers.
Study potential assets carefully.
Choose the right location.
Evaluate the risk factors.
Get satisfactory financing in place.
Seek Expert Financing Assistance
Contact Capital Finance Partners to secure the funding you need. We offer a comprehensive portfolio of loan products including commercial real estate financing.