Commercial Property
Definition:
A Commercial Property is real estate that is used for business purposes rather than residential living. This includes office buildings, retail spaces, warehouses, and industrial properties. Commercial properties are often leased to tenants, generating rental income for the owner, and are typically valued based on their income potential.
🔍 Did You Know?
Commercial leases tend to be longer than residential leases, with tenants often responsible for maintaining the property and paying for insurance and taxes.
Examples:
Example 1:
A real estate investor purchases a shopping center with multiple retail stores, collecting rent from each business tenant and managing the property as a commercial investment.
Example 2:
A developer builds a commercial office tower and leases the floors to companies seeking office space, generating significant rental income over long-term leases.
Why It’s Important:
Commercial properties can provide higher rental yields than residential properties, making them attractive to investors seeking higher returns. However, they also tend to require more management and have higher risks due to market volatility.
Who Should Care:
- Commercial real estate investors seeking long-term income.
- Business owners needing space for operations.
- Lenders offering commercial property loans.
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