When talking about real estate, the first thing I think of is residential properties. You know, those houses for sale and rent that you keep marketing. Some people, like me, do not consider other types of properties. However, it is not too late to learn something new, am I right?

Real estate is not just about houses but also about commercial properties. I am sure you have heard of them, and you might even know someone who wants to invest in some of it. If you do not know much about commercial real estate, you can read on and find out more about them.

Commercial Real Estate

We will start by defining commercial real estate. What exactly does it mean? Most people will immediately think of supermarkets, shopping malls, and large buildings. Trust me when I say those are not the only ones. Did you know that cell towers and mobile home parks are also commercial properties? No? They are.

By definition, commercial real estate includes properties used for businesses or leased to use as a workplace. It includes hospitals, office buildings, retail stores, and many more. Others might confuse some properties if they are residential or commercial, specifically if used for housing. Assets used for human habitation are under residential real estate. However, properties like apartment buildings are considered commercial real estate. Are you as confused as I was when I found out?

Let us try another way to differentiate the two types. To compute the value of the residential real estate, we must consider the comparable prices. It means other properties around it. For commercial real estate, it is more complicated and involves more math.

For example, a person buys a house, installs all the upgrades he can, and increases the market value. The problem is, his property is the only one like it in the area. The appraiser may find it hard to find comparable properties.

Commercial real estate value has a formula we use. The formula is value= income / date of return or value= net operating income / capitalization rate. I told you there’s more math involved.

What are some commercial real estate properties out there?

• Self-storage facilities

These things have become popular nowadays. People have started to use self-storage facilities to keep some of their belongings that have no room in their houses. It is helpful for anyone who does not want to part with personal items but also wants to keep their homes clutter-free. With their increasing popularity, investing in them is a good idea.

• Cell towers

Who would have thought to invest in an area for cell towers, right? Cell towers built by wireless carriers work to broaden and improve their capacity to provide better reception. These companies usually rent the land on where to build their cell towers. Technology keeps on upgrading day by day, and I’m sure the companies will keep on expanding too. Investing in this kind of commercial real estate will be worth it.

• Apartment buildings

Ok, before you get confused, multi-family apartment buildings are considered commercial real estate. However, we cannot classify all of them as such. The number of units in a building is the main pointer. For example, if the estate has 2-4 units, it is classified in the residential category. But if the building has 40-50 units, then it’s commercial.

• Datacenters

With the current pandemic, everything and everyone is affected. Almost everything is going down because of this. However, the data center demand has boosted as we utilize the internet for our activities. We have been using platforms like Zoom for meetings and classes. People have also been using the world wide web to search for properties to rent. It is also the reason why leasing agents are actively online. Leasing agents use platforms like Padleads for advertising vacant properties. They can post property listings and even syndicate them to other popular websites. After all, we can find almost everyone online nowadays.

There are also new companies popping up everywhere, and it’s going to multiply even more. We all know technology will stay for a long time, so why not use it to earn an income?

These are only some things that you or someone else might want to check out. Commercial real estate can also include mobile home parks and senior living. There are plenty of opportunities out there if you only know where to look.