Is an Apartment Building Considered Commercial Real Estate?
Posted 01/28/10
Have you decided you want to try to invest in commercial real estate? Maybe the downturn in the economy has turned you off to commercial real estate options? The truth is that there is still money to be made in commercial real estate. All you have to do is pay attention to all of the failed businesses and see the for sale signs to realize these properties are going for really good prices. Commercial real estate has always been a safe investment. In fact, some people only invest in real estate because of the returns. There are all types of properties to snatch up as commercial real estate investments.Ok, maybe you are wondering what kind of properties qualify as commercial real estate. This kind of real estate is the kind that is zoned for business. For example, it can be a piece of property with a strip mall on it. It can be vacant land that has been set aside and zoned by the city to allow a business to be built on it. It may even be a piece of property with a place of residence now standing on it. What happens is that the town may begin to encroach on residential property and then the property may be rezoned to allow it to be reclassified as commercial real estate now. A town may grow to the point where a house that was safely located in a residential zone may need to be cleared out for commercial real estate once the town has grown to a certain point.
Most people think that commercial real estate is an office building or a factory or perhaps an industrial unit. In fact it is safe to say that any piece of property that has more than four residential units on it is commercial real estate. Commercial real estate like this is very much in demand for investors. Why is that? It is because this type of real estate is still very profitable. It is even more profitable than residential properties.
Commercial real estate investment profits can be through the roof if you know what you should be looking for. You can turn around and lease out the property once you have purchased it. When there is an expectation of growth in a certain residential area the commercial property is easily leased out. Before you make your investment though you should evaluate the potential growth of the area carefully. If the expectations of growth are really positive it is even a good idea for you to get a partner to invest in the commercial real estate with you.