Commercial real estate refers to land or buildings intended to make a profit by rental income or capital gain. Commercial property is not restricted to commercial spaces in a building itself but also includes office space, warehouse buildings, shops, commercial offices and parking structures.
Commercial property is often seen as an investment property but this is not always the case. The difference between commercial and residential real estate can be seen in its purpose. Residential property is designed to serve the general public and the purpose is not necessarily to earn a profit but rather to provide housing. Residential properties include apartment complexes, condominiums, town homes, manufactured homes and mobile homes.
Commercial property on the other hand is designed to earn profits through rent. The purpose of commercial properties is not to create a profit but rather to create a revenue stream so as to pay off the costs of construction. Commercial properties can be anything ranging from restaurants, retail establishments to warehouses.
Commercial property has a number of uses. One of the most common uses is as a place to rent. Commercial property is often located in residential neighborhoods, where it can be rented for a monthly fee for a specific period of time. In order to maximize the income that one is able to make from renting commercial property, it is advisable that the property should be zoned for commercial use so as to attract the right tenants.
Commercial property can also be purchased in order to expand the business. This can be done by using the land itself or even purchasing land around it in order to enlarge the business. The biggest advantage of purchasing commercial property is that the owner is able to use the land for other commercial uses in the future. The disadvantage of buying commercial property is that when one sells the property after that certain period of time, the cost of living may increase significantly, which could result in a loss of revenue in the short-term.
Residential real estate is used mostly for residential purposes and the main purpose is to build a house or apartment for oneself and family. It is not a financial investment as much as it is an investment in the form of an apartment. In order to maximize its profits, one should have a good reputation in the community and ensure that the property is easy to live in.