Commercial Property Types-Which One Is The Best? – Commercial Property

What commercial property types should you buy? You should consider the pros & cons of each property type, as well as, have a good understanding of your investment objectives and your experience. These factors will help lead you to your ideal commercial property.Listed below are the most common commercial property types.Apartments/Multi-familyApartments or multi-family buildings are usually the first choice for new commercial investors. Apartment management and financing is very similar to residential, and so new investors feel more comfortable with them. The main disadvantage with apartments, is that they are management intensive.In order for an apartment to be considered commercial property, it must have 5 or more units. There are numerous sub-types of apartments:Low-Rise Garden ApartmentsMid-Rise ApartmentsHigh-Rise ApartmentsStudent HousingMilitary HousingTownhouse StyleCo-opWhen you are looking at properties to purchase, pay close attention to the location and general market for that area. You will want to avoid properties that are located in economically depressed or seasonal areas. Also, the property should have acceptable aesthetic qualities to be competitive with market standards and have a minimum occupancy of at least 85%.What if the property you are evaluating has inferior physical characteristics or is in an economically depressed area?You may have a higher interest rate, higher reserves and tighter underwriting constraints.Mobile Home ParksMobile homes can be a wonderful investment, especially if you own the land and sell off the mobile home. You’re just renting dirt at that point! If you’re not familiar with mobile home investing, you need to read “Deals On Wheels: How To Buy, Sell And Finance Used Mobile Homes For Big Profit And Cash Flow” by Lonnie Scruggs. This book is a gem! Lonnie explains how to buy and sell mobile homes on a note. His presentation is very basic and understandable.Now back to mobile home parks. Mobile Home parks are rated as 1 Star, 2 Star, 3 Star, 4 Star, and 5 Star. The Star ranking is based on the conditions and amenities of the park.A 3 Star park usually has a mix of single and double wide homes that are in good condition. The park is attractive and offers some amenities.A 4 Star mobile home park usually only has double wide homes that are skirted and in good condition. The homes will have concrete patios or raised porches.A 5 Star mobile home park can be characterized as having deluxe accommodations, with a wide range of amenities and services. The homes are usually set back from the curb with paved streets, sidewalks, street lights and signs. The park is located in a desirable neighborhood and accessible to retail and community services. The homes are late model doublewides and modular homes in excellent condition.The mobile home park should have at least 85% occupancy and be located in desirable areas. Also, be cautious if the park has too many homes for sale (more than 20% of total pads) or more than 20% of total pads are rented homes owned by the park.RetailRetail properties are properties that are occupied by one or more tenants and the property is utilized for retail purposes.A free standing retail, strip center with an anchor tenant is a well known commercial retail business such as a national chain store or regional department store strategically placed in a shopping center so as to generate the most amount of customers for all of the stores located in the shopping center. An Unanchored retail center is a center which is occupied by multiple tenants of which none are anchor tenants.Single tenant investment grade retail properties are properties that are net leased to one investment grade tenant (BBB- rating or higher).OfficeThe different categories of offices include:Suburban Garden OfficeSuburban High Rise OfficeMedical OfficeCentral Business District (CBD) OfficePotential office buildings should have a minimum of 85% occupancy and is located on or near a main thoroughfare and easily accessible. Properties that have more than 20% of total revenue from owner occupied or owner affiliated tenants, will usually have a higher interest rate on any loans.Mixed-UseThese properties will be a combination of any of the above property types. A real estate development of mixed use properties, should be complementary to each other.HealthcareThese property types are nursing homes, congregate care and assisted living centers. Properties should be close to retail and community services. Be cautious of properties in economically depressed or seasonal areas. Also, be sure that the property complies with ADA requirements.HotelHotels are characterized as either Full Service or Limited Service.Full Service Hotels can be further divided into Luxury, Upscale, Mid-scale, and Extended Stay hotels.Limited Service Hotels can be further divided into Mid-scale, Economy, Budget and Extended Stay. When considering hotel properties, the property should have a stable operational history. A property with a history of four or less years should be scrutinized. The minimum acceptable occupancy is usually 60%. Lenders also prefer franchise affiliated hotels with franchise agreements extending beyond the term of the proposed loan.IndustrialThese property types will have usage for industrial purposes only. Such asWarehouse-single tenantWarehouse-multi tenantManufacturingResearch & DevelopmentFlex SpaceLight IndustrialHeavy IndustrialSelf StorageAlso is called Mini-Storage, it is used for personal storage for lease by consumers.Other SpecialtyThese property types are unique and the financing them can be difficult. They include
gas stations, oil change facilities, etc.

How To Invest In UK Commercial Property! Exclusive Interview with Peter Bill of the Estates Gazette – Commercial Property

Peter Bill, Editor of the Estates Gazette as well as 7 others experts in UK Commercial Property investing have teamed up to talk about how to successfully invest in UK Commercial Property.Fiona Goldman recently interviewed Peter Bill, editor of the Estates Gazette.Asking Peter Bill what his thoughts are on the future of the UK Commercial Property Market gives any prospective commercial property investor a real insight into where the UK market is heading in the next few years.Fiona asked Peter “Would you say Great Britain is still a buoyant market to invest in with regards to property”Peter replied “Yes I think it is, as we speak I think its been buoyant now for 8 or 9 years.Is it slowing down? This we keep saying it’s going to but every year it keeps going up. If you can imagine a very tall glass filled with water on one side of the table and a very short glass filled with water on the other side of the table. The small glass for the amount of property that there is in the world and tall glass for the amount of money chasing it. At the moment there is probably 10x as more water or money as there is to property to buy. So there’s a massive over supply of money to property at the moment so that’s what has been driving it and will continue to drive it, its completely globalised now.”This is great news for any prospective commercial property investor be they novice, intermediate or advanced investors in residential or commercial property investing in the UK.To emphasise the benefits of investing in the UK Commercial property market right now, Stuart Law, founder of Assetz Finance, mentions his experiences in UK commercial property investing and why he thinks now is the time to invest in the market. Stuart say “Commercial property could also be new built student halls which are carved up into individual student apartments. That’s a particularly low hassle and a longterm investment and that’s generally high income as well. With commercial property, there really is two ways you can go in. You can go into commercial property by sector, so retail, shops, etc, offices or industrial. But another way of looking at is, whether or not the property is tenanted or untenanted, its very important to understand that with commercial investment its not been done before, but when you buy a property with a tenant in place, you’re paying a premium for the lease. The lease is the promise to pay, each year, four quarterly payments of rent. If you buy a building with out that promise and without that tenant in place, then you are just buying bricks and mortar. And when you buy bricks and mortar with a lease, you pay more.”Issues such as taxation are important to consider when investing in uk commercial property. Amir Saddiq founder of the Property Tax Portal says “Say somebody purchased a property for £50,000 five years ago and its now worth £150,000 which is quite feasible, they may well have to report property values and they maybe liable to pay tax of upto 40% on the £100,000 profit. They have only got 25% left of equity on the property but they could have tax liablilitys as high as £40,000. So there the kind of areas that Daniel Feingold iin particular would start to get involved as he could help restructure people’s assets and give them the development advice they require”Daniel Fiengold head of a leading independent tax consultancy in the UK, called Strategy Tax Planning said “Correctly structured, tax is only 22% in the UK. If you borrow to acquire a property you can offset the interest so it starts to slide down from 22% so a lot of people are effectively paying something like 10 or 11% tax on their rental income which is obviously a very attractive rate, a very low rate and in addition paying no capital gains tax. It provides a very, very exciting investment opportunity for them but its all about getting the right structure from the start. If someone comes to me saying I’ve bought a property then alarm bells normally ring but if someone comes to me saying I’m looking, I’m considering, I’m about to, then its normally the point at which I can give the right advice and get them in a position to minimise their UK tax liabilities.Copyright 2006 Invest UK Publishing