Commercial real estate is a way to invest and earn income

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Commercial real estate is a premise or other object that is acquired for profit and has a corresponding purpose. Rapidly developing and growing megacities, including Moscow, have a high demand for objects of this type. The commercial real estate market is growing every year. It is difficult to find a house under construction or a cottage settlement where such facilities would not be available according to the project.

Types of income from commercial real estate

Residential property is less popular than commercial property. Moscow has great prospects for generating income from such facilities.

With the help of commercial real estate receive active and passive income.

Active is income that requires active activity. In the event of termination of activity, earnings also cease.

Passive - income that does not depend on a permanent job and does not require personal presence. He has manybenefits and is the ultimate dream for many.

Commercial real estate is an opportunity to receive passive income.

How to make money in commercial real estate

They earn money on commercial real estate by acquiring and further selling objects. But it comes with certain risks.

This type of activity is better not to carry out during times of crisis and instability. Instead of making a profit, you can get only losses. In addition, wide and active advertising is necessary for the quick sale of commercial real estate.

The second common way to make money is using commercial real estate. You can buy a house or a building, open a shop in it and receive a stable income. Or renting out property, which will be passive income and less hassle. The amount of profit directly depends on the size of the object: the larger it is, the higher the income.

When selling real estate, you need to draw up and sign documents. Renting an object does not provide for this.

What to look for when buying commercial property

Commercial real estate is objects, when buying which you need to take into account some features:

• Legal purity. Before purchasing an object, it is mandatory to check for restrictions.
• Objectivity of the declared price. Monitoring of the real estate market should be carried out constantly, since price fluctuations can affectvalue at the time of the transaction.
• Availability of a full package of documents. Also, checking the absence of payment arrears will be useful.
• Where commercial property is located. Moscow is replete with high-rise office centers that are designed for doing business. However, the rent for an object located in the center is several times higher than for a similar one located in the suburbs. The central part of the city and developed infrastructure will increase the rent by several times.
• The area of the room. When buying, it costs more, but when renting, it brings more income.
• Availability of parking and convenient entrances, storage and other premises. Relevant for objects purchased for shops or offices.

There are situations when a commercial real estate object is sold, the land plot of which does not correspond to the intended purpose of such an object. For example, retail premises are located on industrial land.

In this case, the planned period for paperwork will increase, since it is necessary to change the purpose of the site, and only then register the ownership.

Commercial real estate

These include:

• office rooms and entire buildings;
• storage facilities;
• hotels and holiday homes;
• shops, boutiques, malls;
• garages, service stations, car washes;
• cafes, restaurants and so on.

He who believes thatCommercial real estate is exclusively non-residential premises, not right. Residential premises can also be classified as commercial if the owner has purchased and leases it.

Trading as a way to acquire commercial real estate

It's no secret that the market value of commercial real estate is not limited to tens of millions of rubles.

Those who realize all the benefits of earning from commercial real estate, but do not have such funds, are looking for alternative ways to acquire it.

Bankruptcy auctions have recently become especially popular for the purchase of commercial real estate.

Very often, commercial real estate objects are put up for auction, their prices are minimal. The public offer makes their cost lower each time. There are precedents when objects went under the hammer for 5 thousand rubles. The uniqueness of selling commercial real estate through bidding lies in the fact that over time, the value of the lot decreases on completely legal grounds. You can wait for the most reasonable price and then buy the object you like.

This is a real lifeline for those who have decided to go into commercial real estate, but are on a tight budget.

There is one downside: you should not hope that an object purchased at a cheap auction will immediately begin to generate income with five or six figures.