Property can be more than just a place you
live it can become a way to generate income.
As an investor there is a wide variety to invest in real estate. Commercial properties are defined as land or
buildings that are zoned for and intended for the generation of profit. There
is a broad range of properties that fall into this category which ranges from
residential rental units all the way up to large industrial complexes.
Residential
rental units range from small duplex properties, or
all the way up to large high rise type apartment buildings. Landlords
experience a wide variety of challenges such as tenant issues, building
maintenance and taxes but an ability to deal with issues and placate tenant can
be a great way to generate regular income while building equity in a
property. Obviously being able to
provide housing for a number of tenants without having to maintain several
properties has benefits such as reduced maintenance costs however issues
regarding individual tenancies tend to increase as does the time commitment
required to properly manage the property. Residential apartment complexes offer
an affordable housing solution in densely populated areas for tenants.
Office
buildings, including medical offices, are designed
to accommodate various professional organizations in a convenient
location. The professionals who lease
office space in these buildings tend to provide related services to consumers.
This benefits the professional, the consumer and the landlord.
The professional benefits from convenience
realized by the consumers and may even save time and costs when contacting and
referring consumers to another service that compliments the consumers needs. A
good example of this type complimentary service is a physician's office in the
same building as the medical laboratory and an x-ray clinic.
The consumer benefits from the convenience
of parking in one place and being able to accomplish a number of things all in
one building. The example above regarding the medical clinic would allow the
consumer to visit with the family physician, go to the medical laboratory for
blood work and in some cases, return to the physician's office for immediate
follow up.
Of course the landlord benefits from this
relationship by reaping the financial benefit of competitive rents and even
income from parking fees. Consumers and
professionals alike are often willing to pay a little extra in order to receive
efficient service.
Gasoline
stations often combine complementary services for
consumers such as convenience stores, car washes, and even vehicle repair
shops. Other larger stations, which are typically located along major roadways,
include amenities for travellers such as restaurants, television lounges and
even shower facilities. Owners benefit from the increased income from consumers
who are often delighted that they are able to get the necessities that they
require all in one place. Similar to the
landlords of multi-plex and office buildings, owners of gas stations are able
to benefit from the reduced maintenance costs in comparison to managing several
different locations.
Restaurants tend to be located in areas which offer various services to
consumers. A shopping plaza often houses an eating establishment of some sort
in. Another example would be an area that caters to tourists and other
visitors. Often times a hotel or motel will be nearby.
Shopping
centres are commercial buildings that house a
number of amenities for consumers. These centres typically contain a grocery
store, a clothing store, an eating establishment, a financial institution, and
in larger shopping centres an office section.
Landlords benefit from long term leases and stable tenancies. Leases tend to be more complex than
residential tenancies but the long term payoff can make owning a shopping
centre very rewarding.
Hotels,
motels and other accommodation properties are
designed to generate a profit to the owners similar to those of residential
multi-plex buildings. The primary
difference being the shortened lease term.
Most people do not realize this but they are actually entering into a
short term lease agreement when staying at a hotel or motel even when it is
only for one night. Owners of accommodation properties often provide a reduced
rate for longer term stays as this reduces the expense of changing the room
after daily lease terms.
Parking
lots, in some market places, are clearly intended
as profit centres. Large cities with
limited parking have rather pricy pay per parking services. Often times these higher priced parking lots
are located close to high traffic amenities such as shopping centers, theatres,
and other attractions. The increased fees may be due to additional services
provided by the parking lot owner such as security and valet services. Parking lots also benefit from low overhead
due to the fact that there is not a structure to maintain and in some cases
payment can be taken through an automated system.
Convenience
stores, as mentioned above, are typically located
in or nearby gasoline stations but are also in shopping centres and small
communities or as a standalone business.
As the name indicates these stores are designed to be convenient but
also to generate a profit for the owner.
They carry a wide variety of connivance items that consumers regularly
seek which creates a regular income stream.
Industrial
Buildings are best suited to business owners. These consist of warehouse space,
manufacturing as well as wide variety properties suites to other industrial
uses. These properties have meet zoning
requirements allowing specific industrial uses.
Industrial properties traditionally have features that are tailored to
the business they house like, truck level loading docks, 3 phase electrical
service, high ceilings, and specialized equipment. Industrial space is typically isolated from
residential area and required multiple employees to operate and maintain the
facility.
As you can see the classification of
commercial and investment real estate encompasses a wide range of properties.
The most common uses of commercial and investment properties are office
buildings, gas stations, restaurants, shopping centres, hotels and motels,
parking lots and convenience stores.
Residential multi-unit properties are a great entry level opportunity
for new investors. But there is a
commercial property that is ideal for all levels of investor.
