Commercial Properties

Written by Jessica Duquette
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Commercial properties can be broken down into three different categories for investment purposes. Apartment buildings, retail space and industrial or warehouse properties are the core of commercial investing. Each of these types of investments has its own set of benefits and subsequent pay off.

Different Types of Commercial Properties

The first type of commercial property is an apartment building. Though slightly larger in investment compared to a primary residence, the potential income on an apartment building makes the up front cost worthwhile. A monthly mortgage is usually covered by the rent of one or two tenants. Additional rent fees directly affect the owner's profit margin.

Retail commercial properties can generate substantial passive cash flow as long as certain conditions are met. The financial market and area growth are two factors that can influence end profit. Owners can't charge more than the building next door and shouldn't charge less for space that could be bringing in more cash. Without a commercial tenant, owners start to experience a negative cash flow; which should be avoided at all costs.

The Value of Industrial Property

Industrial commercial properties are a wise investment for several reasons. First, the turnover of tenants isn't nearly as high with industrial space as opposed to apartments or retail properties. This ensures a steady stream of revenue for several years. Secondly, unlike apartment buildings, warehouse space requires very little maintenance or work. There is no imminent need to improve the property in order for the property to appreciate.

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