Commercial Property Types-Which One Is The Best?

What commercial property types should you buy? You should consider the pros & cons of each property type, as well as, have a good understanding of your investment objectives and your experience. These factors will help lead you to your ideal commercial property.

Listed below are the most common commercial property types.

Apartments/Multi-family
Apartments or multi-family buildings are usually the first choice for new commercial investors. Apartment management and financing is very similar to residential, and so new investors feel more comfortable with them. The main disadvantage with apartments, is that they are management intensive.

In order for an apartment to be considered commercial property, it must have 5 or more units. There are numerous sub-types of apartments:

  • Low-Rise Garden Apartments
  • Mid-Rise Apartments
  • High-Rise Apartments
  • Student Housing
  • Military Housing
  • Townhouse Style
  • Co-op
  • When you are looking at properties to purchase, pay close attention to the location and general market for that area. You will want to avoid properties that are located in economically depressed or seasonal areas. Also, the property should have acceptable aesthetic qualities to be competitive with market standards and have a minimum occupancy of at least 85%.

    What if the property you are evaluating has inferior physical characteristics or is in an economically depressed area?

    You may have a higher interest rate, higher reserves and tighter underwriting constraints.

    Mobile Home Parks

    Mobile homes can be a wonderful investment, especially if you own the land and sell off the mobile home. You’re just renting dirt at that point! If you’re not familiar with mobile home investing, you need to read “Deals On Wheels: How To Buy, Sell And Finance Used Mobile Homes For Big Profit And Cash Flow” by Lonnie Scruggs. This book is a gem! Lonnie explains how to buy and sell mobile homes on a note. His presentation is very basic and understandable.

    Now back to mobile home parks. Mobile Home parks are rated as 1 Star, 2 Star, 3 Star, 4 Star, and 5 Star. The Star ranking is based on the conditions and amenities of the park.

  • A 3 Star park usually has a mix of single and double wide homes that are in good condition. The park is attractive and offers some amenities.
  • A 4 Star mobile home park usually only has double wide homes that are skirted and in good condition. The homes will have concrete patios or raised porches.
  • A 5 Star mobile home park can be characterized as having deluxe accommodations, with a wide range of amenities and services. The homes are usually set back from the curb with paved streets, sidewalks, street lights and signs. The park is located in a desirable neighborhood and accessible to retail and community services. The homes are late model doublewides and modular homes in excellent condition.

    The mobile home park should have at least 85% occupancy and be located in desirable areas. Also, be cautious if the park has too many homes for sale (more than 20% of total pads) or more than 20% of total pads are rented homes owned by the park.

    Retail
    Retail properties are properties that are occupied by one or more tenants and the property is utilized for retail purposes.

    A free standing retail, strip center with an anchor tenant is a well known commercial retail business such as a national chain store or regional department store strategically placed in a shopping center so as to generate the most amount of customers for all of the stores located in the shopping center. An Unanchored retail center is a center which is occupied by multiple tenants of which none are anchor tenants.

    Single tenant investment grade retail properties are properties that are net leased to one investment grade tenant (BBB- rating or higher).

    Office
    The different categories of offices include:

  • Suburban Garden Office
  • Suburban High Rise Office
  • Medical Office
  • Central Business District (CBD) Office
  • Potential office buildings should have a minimum of 85% occupancy and is located on or near a main thoroughfare and easily accessible. Properties that have more than 20% of total revenue from owner occupied or owner affiliated tenants, will usually have a higher interest rate on any loans.

    Mixed-Use
    These properties will be a combination of any of the above property types. A real estate development of mixed use properties, should be complementary to each other.

    Healthcare
    These property types are nursing homes, congregate care and assisted living centers. Properties should be close to retail and community services. Be cautious of properties in economically depressed or seasonal areas. Also, be sure that the property complies with ADA requirements.

    Hotel
    Hotels are characterized as either Full Service or Limited Service.

    Full Service Hotels can be further divided into Luxury, Upscale, Mid-scale, and Extended Stay hotels.

    Limited Service Hotels can be further divided into Mid-scale, Economy, Budget and Extended Stay. When considering hotel properties, the property should have a stable operational history. A property with a history of four or less years should be scrutinized. The minimum acceptable occupancy is usually 60%. Lenders also prefer franchise affiliated hotels with franchise agreements extending beyond the term of the proposed loan.

    Industrial
    These property types will have usage for industrial purposes only. Such as

  • Warehouse-single tenant
  • Warehouse-multi tenant
  • Manufacturing
  • Research & Development
  • Flex Space
  • Light Industrial
  • Heavy Industrial
  • Self Storage
    Also is called Mini-Storage, it is used for personal storage for lease by consumers.

    Other Specialty
    These property types are unique and the financing them can be difficult. They include

    gas stations, oil change facilities, etc.

    Tips for Securing Commercial Lawn Mowers for Commercial Landscaping Properties

    A lawn care or landscaping company with the knowledge and experience needed to handle the care for large commercial properties needs the right tools at their disposal in order to handle these commercial landscaping properties. That means only the best commercial lawn mowers designed specifically for large-scale properties. You want your handiwork to speak for itself whenever you drive off from a freshly-manicured commercial property, so here's how to not just secure new commercial property owners as clients but how to keep them by providing the best service you can.

    Don't Be Afraid to Scout While On the Job

    The life of a professional landscaper entails a lot of driving from job to job, and this represents an excellent opportunity to scout out new possible properties to approach to see if their owners are looking for landscaping services. Commercial properties with large, neglected lots are always ripe for the plucking, especially as sometimes the companies that occupy properties, such as law offices and similar professional services, are responsible for their own landscaping and do not have a property management company to rely on. Once you've gotten a good list of what might very well end up being new clients, you'll have to track down who it is you'll have to talk to in particular about landscaping services. Whether it is a grounds manager or a business owner, you will need to do some Googling – or better yet just knock on doors and strike up conversations with receptionists or other staff at the front desk.

    Be Yourself with Prospective New Clients

    It's important to be genuine when you're looking to forge new connections with potential clients. Business owners are inclined to be friendly with a fellow business owner, especially when they present themselves honestly and professionally. Being open and honest can help show prospective clients that it will be easy to work with you, even if it just means that you're proficient at making small talk. However, when it comes time to get down to brass tacks, you'll need to be straightforward and simple about what you can provide to a company, what types of commercial lawn mowers and other equipment you use on a regular basis, and how much all of these services will cost.

    Don't Lose Hope

    Finally, don't get discouraged if you keep asking around and all you're getting is rejection after rejection. Not every business out there cares or even thinks about the landscaping on their property. Moreover, those who do reject your offer will sometimes give you feedback as to why you were passed over, providing you an opportunity to hone your sales pitch and strengthen your positions for future endeavors.

    Of course, it does not matter how well you can smooth-talk a client unless you have the equipment to back it up in your trailer. Make sure to use only the most safe and efficient commercial mowers that can stand up to the strain of large, robust commercial.

    Commercial Property As the Ultimate Storehouse of Value – 14 Winning Tips

    To help invest in property that most nearly fits your wishes, let's start by understanding the likenesses and differences, as well as the benefits and disadvantages, of owning a commercial property versus owning a home one. Here are a few winning tips to serve as your steering light in an ocean of doubt.

    1. Have clauses of every Sale & Purchase Agreement explained to you by a Barrister before execution.

    2. Reasons your capital outlay is higher with commercial property are: commercial properties generally cost more and the margin of financing by banks is ten to fifteen percent lower. Rates of commercial property loans are sometimes higher than home property loans and the terms are generally not as flexible.

    3. Capital appreciation of commercial properties are relatively higher than home property traditionally. With commercial properties you will most likely be working with companies and corporations whereby management is more ecstatic.

    4. The value of a property is sometimes in close relation to the income it generates.

    5. Approval level of upward rental revision is far higher with commercial properties.

    6. With the properties, there are countless strategies you might support your tenants' business.

    7. Lease your property to firms / companies with successful track records and / or appropriate firms for the vicinity.

    8. Long term leases can be anticipated from renters of properties.

    9. It's a norm for renters of properties to ask for a rent-free period for refurbishment to be carried out.

    10. Renters of properties generally take better care of your properties.

    11. There's nearly always a budget for reconstruction works for properties put aside by your renter. There is not any prerequisite to furnish your commercial property.

    12. Application rates and rates for give up rent and assessment are higher for commercial properties. Service charges can be applied to office lots, retail lots, serviced terraces, commercial shop-lots with facilities as well as some guarded commercial lots.

    13. Collection of delinquent rental for properties is simpler in comparison to home properties due to straightforwardness of access.

    14. The trend and requirement for intellectual commercial buildings is growing far more fast than smart houses. Unlike home properties, when the alignment of the project is favorable, it is OK to go for commercial properties found at T-junctions.

    The excellent news is, you picked up this information and that already differentiates you from the outwardly blind flock of investing sheep. This information is one of the finest methods to start your successful property investment journey.

    The Advantages Of Getting Commercial Property Management Firms

    People who own a commercial property can get more than enough cash flow from their commercial property and definitely have guaranteed financial security for your future. Of course, both of these benefits do come with a price. One of these is the property has to be in good condition to maintain or increase its value. Otherwise, you will have to spend more money on maintenance and taxes.

    Considering commercial property management firms is an excellent solution. Instead of you, and a handful of people you know, running your commercial property, you get another company to do the managing so it will be less hassle and stress-free. Check out some advantages that you can get from getting these services from professional property management experts.

    – You will be able to provide the very best service to tenants. A commercial property firm will have the systems and the people in place to address every kind of tenant concern, from the smallest utility issue to the more serious security problems. Even though you own a fairly small commercial building, servicing tenants and making sure they are satisfied (and safe) can be time consuming as well as energy draining. Unless you have nothing else to do with your days, then you could better serve your tenants by hiring a business management firm to do the job for you.

    – You can get better tenants for your commercial property. One of the ways to maintain profits is to get the best tenants. This means tenants who pay on time and who also take care of their leased spaces as their own. Delinquent tenants not only dissolve profits, but they also create a lot of stress.

    – Property professionals have the experience to manage your property. From collecting rent to implementing maintenance work, these business managers can handle every aspect of running any building. They do the job for you so you don't have to be stressed out or be hassled.

    – A well-managed property will never fail to yield revenue. With expertise and experience at the helm of your business venture, you are sure to turn over a good profit every time. Some of the best leasing companies even assess your terms and make appropriate recommendations so that you not only reduce problems but also boost revenue.

    – You need to relax and enjoy your investment. Finally, what good is a property investment if you can't even find the time to relax and enjoy the profits you have earned? With the right management firm, you can do that now. Click here to know more.