Commercial real estate investing is a type of real estate investment. It mainly focuses on going into real estate investing with the aim of renting out properties mainly for business and not residential as residential real estate investment does. The main difference between commercial and residential real estate is that when renting out a residential property, one pays a monthly charge (rent) while for commercial real estate, what one pays depends on the square footage of the property. Time is a key part of investing as before investing one need to consider certain things like the current market trends.
Commercial real estate investing is important because it reduces the levels of risk. This mainly happens when an investor loose a tenant. When one has many tenants and one tenant moves out the investor will only lose out on the rent from one investor as opposed to where there is only one tenant. Commercial real estate investing is also more profitable. This is because with the mode of pricing that is used (per square foot pricing) an investor is able to rent out to very many people at a high price thus more revenue. Commercial real estate investment is also less risky that residential investing. This is because businesses move premises less often as compared to families hence an investor can be much sure that their tenants will stay for a long period of time and this means that the revenue inflow will be steady. From the above information we can see that commercial investment have a much higher chance of success than residential real estate.
Despite all the positive things about commercial real estate, it is important for one to note that the risks that one can face by investing in residential real estate can also be met here. One therefore needs to know that whatever the real estate investment type one decides to go in to the risks are the same and both education and care are important for one to attain success. We can also say that commercial real estate and residential real estate are quite similar though the returns are what make them different.