Commercial Property Types-Which One Is The Best?

What commercial property types should you purchase? You need to think about the pros & cons of every single property variety, as well as, have a good understanding of your investment objectives and your experience. These elements will aid lead you to your perfect commercial property.

Listed beneath are the most common commercial property kinds.

Apartments/Multi-familyApartments or multi-family buildings are usually the initial option for new commercial investors. Apartment management and financing is really similar to residential, and so new investors really feel a lot more comfortable with them. The primary disadvantage with apartments, is that they are management intensive.

In order for an apartment to be regarded as commercial property, it ought to have five 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.

When you are looking at properties to invest in, pay close attention to the location and general market for that location. You will want to prevent properties that are located in economically depressed or seasonal areas. Also, the property really 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 region?

You may possibly have a greater interest rate, larger reserves and tighter underwriting constraints.

Mobile Home Parks

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Now back to park homes. 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 normally has a mix of single and double wide homes that are in great condition. The park is attractive and provides some amenities.A 4 Star mobile home park usually only has double wide homes that are skirted and in excellent condition. The homes will have concrete patios or raised porches. A 5 Star mobile home park can be characterised 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 superb condition.
The mobile home park need to have at least 85% occupancy and be located in desirable areas. Also, be cautious if the park has too many houses for sale (more than 20% of total pads) or much more than 20% of total pads are rented homes owned by the park. Park homes for sale are avaliable at www.lifestylelivinguk.com.

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

A free of charge standing retail, strip centre with an anchor tenant is a well known commercial retail business such as a national chain retailer or regional department store strategically placed in a shopping centre so as to create the most amount of consumers for all of the shops located in the shopping centre. An Unanchored retail centre is a centre which is occupied by a number of 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).

OfficeThe different categories of offices consist of:
Suburban Garden Office Suburban High Rise Office Medical Office Central Business District (CBD) Office
Prospective office buildings ought to have a minimum of 85% occupancy and is located on or close to a main thoroughfare and easily accessible. Properties that have a lot more than 20% of total revenue from owner occupied or owner affiliated tenants, will typically have a higher interest rate on any loans.



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


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

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

Full Service Hotels can be additional 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 really should have a stable operational history. A property with a history of four or much less years really should be scrutinised. The minimum acceptable occupancy is generally 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 Study & Development Flex Space Light Industrial Heavy Industrial
Self Storage Also is known as Mini-Storage, it is employed for personal storage for lease by customers.

Other Specialty These property types are exclusive and the financing them can be challenging. They contain
gas stations, oil change facilities, and so on.

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