Real Estate Investment
Are you thinking of investing in real estate, but are unsure of the type of property which is supposed to invest in it? Well, I do not think too much, where we'll show the difference between the two types of the most popular types of real estate to help you in your decision.
1-Commercial Real Estate.
You need to understand what it means to each type and the pros and cons of investing him before deciding to invest in any of them.
A commercial real estate: -
Any type of property which does not include housing by one family, and therefore, it includes office and residential buildings that contain more than five units, industrial real estate and retail real estate buildings.
(B) Residential real estate: -
It is real estate that is used only for residential purposes (apartments, villas, apartments, duplexes ... etc.)
The only thing here like-between residential and commercial real estate is that both types of drugs and that's all.
The differences between commercial and residential real estate: -
1. Commercial real estate: - PROS: -
** The owner does not need to deal with the expenses related to maintenance and repairs as the tenant will deal with all of this the way that fit his work and make it look better.
** Cash flow is good for a long period of time where the lease runs for longer periods of residential real estate and can be up to 5 years and more with a chance of supplying it.
** Landlord is not obligated to be performed to deal with tenants (especially if it is a huge investment, such as construction of shops retail), their problems, collect rents, where large, such as commercial real estate investments are managed by companies to manage the real estate and who will deal with all these things without having to annoy you .
** Tenants are strong financially. Cons: -
** Investment in commercial real estate requires a huge amount of money because they cost a lot
** Because the tenants renting the place for the management of their business, in the economic conditions of the poor can lose this precipitant money and will cause the departure of the place even before the end of the lease infrastructure to leave the owner with vacant space for a long time in addition to having to cover the various costs incurred by companies Electricity and other until he finds a new tenant.
** As we said, there is a need for a lot of cash to invest in this type of real estate, where the bank loans for commercial real estate are lower than those granted to residential, and therefore must be locked physically before thinking about this type of investment.
** Sometimes it is difficult to find tenants who are willing to pay the required amount for rent.
** It's hard to sell it as the demand for such properties is not thick enough.
2. Residential real estate: - PROS: -
** It easier to find the tenant in this type of investment because people are always looking for a place to live.
** Investment in residential property does not cost as much as commercial real estate.
** Cash flow may not be as high as in commercial real estate, however, it constantly because people will not stop searching for a place to live.
** Regardless of economic conditions, the place will not be vacant, however, may be reduced rental fee, but will always be a place lessor.
** Easy to sell residential real estate, especially if they are in a very attractive and close to all the vital sites zone in addition to the presence of many facilities. Cons: -
** Will be your consciousness to deal with tenants and their problems on your own, as the contract with the director of real estate can cost you more than a rental fee.
** Some tenants do not pay rent on time and others do not leave the house at the end of the lease term.
** Some tenants damage the property is going to happen, which requires you to repair such damage and maintenance before it at the rented to someone else and it will cost a lot of money especially if the damage is great. The advantages and disadvantages mentioned above are not everything, but it sums up the most important thing you need to know before investing decide in any of the types of real estate in question, however, you need to understand that there is no better than the other investment because each one of them to serve different purposes and needs.