Commercial Real Estate FAQ
Not a real estate expert?
For the majority who wish to know more about the ins and outs of commercial properties, here are the answers to some of your FAQs.
1. What counts as a commercial property?
In the simplest sense, commercial properties are for-profit sites. Typical commercial properties are office buildings, retail shops, multifamily housing, and warehouses. Hotels, sports facilities, and hospitals are also counted as commercial properties. Like any business, the cash flow of commercial properties depends mostly on timing, market conditions, and current tenants.
2. How is dealing with a home different with a commercial space?
There are many similarities between commercial and residential deals. However, commercial real estate entails more risks. Buyers, sellers, and renters of commercial spaces are more susceptible to issues regarding titles and liens. There are also zoning problems that may eventually arise.
3. What are the possible risks when it comes to selling commercial real estate?
All investments come with unpredictable circumstances. As much as we would like to anticipate all contingencies, there are certain things we can’t really control. When it comes to commercial spaces, however, it pays to pay attention to the following issues:
- Inconsistency of real estate market
- Land use and zoning problems
- Errors in titles
- Lender or debt services complications
Not everyone involved in commercial real estate experiences these drawbacks but one must always be ready for sticky situations.
4. Is a real estate broker or lawyer really necessary when it comes to commercial real estate transactions?
A broker’s job is to negotiate and arrange deals for clients – but not provide legal advice to buyer or seller. Hiring both a broker and a lawyer to help you deal with the complications of handling and negotiating real estate steers you clear of possible misunderstandings or legal entanglements.