Making Money with Commercial Property Made Easy (Part 1 of 2)
In the recent years, inflation has been steadily rising owing to the ever increasing population. Everything now is more expensive as compared to the earlier times. The purchasing power of money is at an all-time low which means that people need more money.
Also, if one desires to live a comfortable life, then he/she will require a little extra cash. Now, you must be wondering that how to generate those additional funds, right? Well, you must have heard that real estate is a good option for some easy money. Many renowned personalities have significantly invested in real estate so it’s something which you should definitely consider.
There are two types of properties – Residential and Commercial. Residential property used to be the first choice of many but now, commercial property is quickly gaining a lot of momentum due to the following reasons:
- High Return on Investment (ROI)
- Big appreciation of value
- Different options for financing
You too can be on the receiving end of these benefits by investing in commercial properties. There are 4 main types of commercial properties and if you are planning your first move in the commercial space, you should carefully study them all. Here in this post, we’ll be discussing 2 of them. Let’s take a closer look.
- Office Buildings
These buildings are made for office use and can have one or a group of occupants. They can be situated in either single or multiple buildings. When there are many offices in one large structure, it is known as Office Rental Property, and it acts as the property owner’s income source which is received in the form of rent from the tenants.
On the basis of location, they can be classified as:
- Central Business District (CBD): - CBD refers to the business hub of the city. All the latest techniques are used for construction and as a result, the final cost of a building in this region is high. This leads to high rents for the offices located in CBD.
- Suburban office buildings: -Suburbs are the regions which are used for residential as well as commercial purposes. The offices present in these areas have significantly low rents, which is perfect for start-ups and emerging groups.
According to National Association of Industrial & Office Parks (NAIOP), a property can be called an office in case it has at least 75% of its interior designed for official use.
- Industrial Spaces
Industrial space is a type of estate which can be used for a wide array of functions like manufacturing, warehousing, Research & Development, etc. NAIOP has defined three main categories that are used as industrial spaces:
- Manufacturing Unit: - It is a facility which is used for converting, producing and/or assembling raw materials into finished goods. Manufacturing units usually have less than 20% office space, and a major remaining portion is used for production. They can be further classified on the basis of machinery that they use. If the size of the equipment is large and difficult to reconfigure, then they fall under the Heavy Industrial use. But if the size of the machinery is fairly smaller, then they are categorized under Light Assembly.
- Warehouse: - This facility is basically used for storing and distributing goods. They tend to have less than 15% of office space and also have high ceilings that provide more storage space. They can also have specialized services according to the products they store.
- Flex/R&D Space: - Flex is known as a hybrid office and industrial space. It allows the tenants to use the offered flexibility in terms of usage. These properties can have 30% to even 100% office space.
Industrial procedures require huge pieces of land, which is why they’re seldom found in CBD. A reputed commercial real estate company in Inland Empire can help you easily get one of these spaces at a competitive price.