Business Real Estate

Commercial Real Estate and Underlying Investment Opportunity

People are very much aware and familiar about the residential real estate and have the knowledge of when, how and much more to invest in it. But not much of the people have a knowhow about commercial property. Real estate agents like Joe Johnson Welfont can help people at this stage.

Commercial property is one which is solely and wholly used for business purposes. It is further sub divided into three main types namely retail, office and industrial. Let us talk a little about the industrial property. In simple words, industrial property is such a property that is used for industrial purposes. This seems quite easy and simple but it includes lot many things. They come in all shapes and sizes and can be mainly classified into three sizes namely:

Commercial Real Estate

  • Small Industrial Units – These units are for industrial use only with some interior space of the kind of a warehouse or godown which can be used by the small businesses.
  • Large Industrial Units – These can be the manufacturing facilities or warehousing spaces to manufacture or store goods and include distribution companies.
  • Enormous Industrial Units – These are the logistics and large distribution centers that provide the finished goods to the stores or directly to the consumers.

Benefits of investing in industrial real estate

Investing in industrial real estate comes with its own benefits and loss. Given below are some of the major benefits one tends to get from such units:

  1. People investing in industries tend to take the establishment for a longer span of time, upto 10-15 years and hence sign the lease agreements for a longer duration as compared to the residential tenants.
  2. Industrial properties are available in much larger square metres and hence the rent of the space is too high in relation to the higher profits. Their rates are increased annually.
  3. Industrial tenants tend to maintain the establishment well and upto the mark as it directly affects their businesses too. Thus requiring less maintenance from the real owners of the building.
  4. In such types of establishments, the tenant is liable for all the costs namely insurance, maintenance, facilities and repair costs. This again lessens the burden on the real owners thus making them carefree.

Risks involved in investing in industrial real estate

There are certain risks and dangers attached to the industrial real estate. They cannot be overlooked or neglected at any cost. Some of the risks involved are as below:

  1. As compared to the residential units, banks demand a higher amount of deposit or high interest rates in case of a loan. An investment in such units is termed risky in comparison to the residential ones.
  2. In comparison to the residential units, these properties remain vacant for a longer duration of time with regards to the market conditions. At times, it becomes quite difficult to find someone to take the unit on rent.
  3. Location of the industrial unit is a major deciding factor and can affect its usage accordingly. If it is well located then the chances of business are too high.
  4. Industrial units become out dated and obsolete with the technology these days.

Hence, people can put their faith on real estate agents like Joe Johnson Welfont for their property needs.

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