Commercial Property: A Different Ballgame

Sometimes a successful single-family home investor decides it is time to go commercial. That person usually finds that commercial real estate investment is a different ballgame from single-family home investment.

Different factors come into play for commercial investment success than in single-family home investment. The sellers are a different type from single-family home sellers, with different styles and objectives. Also, commercial brokers are a different breed from residential brokers and use procedures that allow them to operate more effectively with their commercia buyers and sellers and lessors and lessees.

Let’s understand what we mean when we refer to commercial real estate. The field is usually divided into four categories. They are office, retail, industrial and land. The factors that assign a particular property to one category or another are generally location, traffic criteria, type of improvements, utilities provided and zoning or other restrictions on use.

The division by categories helps buyers and sellers, lessors and lessees and brokers and agents get together more efficiently for deals. It is part of the lore that needs to be learned when entering a new area. The technical aspects of commercial property investment is certainly knowledge that is required to operate in the field. However, the customs, protocol and procedures are also important, and should be on one’s agenda for learning and practicing. To master commercial property investment, one needs to become comfortable with all aspects which determine success.

There are some hurdles to be cleared for a single-family home investor to become successful at commercial real estate. There is no doubt it is worth the trouble, because of the new opportunities available in the commercial field. As is true with many things, nothing ventured, nothing gained. So why not give it a try? See Buying Commercial Property for a discussion.