If you are just starting your journey in real estate investment, you might wonder what the differences are between commercial and residential property and which will turn a greater profit long term. Though most people are aware that businesses, such as office buildings, apartments buildings, industrial buildings and retail outlets are properties that were designed for commercial use, some residential property could be transformed into a business.
This makes the definition not as clear as it may seem. Did you know that mobile home parks are considered commercial property, but a home that you purchase for the purpose of leasing out is not commercial real estate? If you are looking to invest in Nevada, it is important to know these differences and buy real estate that will benefit you. Here are the key differences between commercial and residential property.
All Commercial Properties Equal Potential Income
One basic difference between commercial and residential property is that all commercial property could potentially bring you additional income. In fact, that is the basic purpose for commercial property and the reason why many investors decide to put their money in this market.
There are multiple ways that one can get into the commercial real estate market. How you start depends on how much money you are able to put towards the project initially. It can be very difficult to find larger properties, such as office buildings, retail outlets or apartments for less than $1 million, but these can have beneficial perks if you are able to make the investment. A cheaper, simpler solution for getting your foot in the door of the commercial real estate market is buying smaller duplex properties. Unlike a larger commercial properties, these require much less money at the starting gate and can be self-managed. From there, the only place to go is up!
Residential Property is Still a Good Investment
Though there is a lot of money to be made in commercial real estate, residential property is still a good investment. Consider this: People will always need good places to live, and single family homes are not going out of style any time soon. You can use a residential property for many different ideas and, depending on its location, you might be able to turn your residential property into commercial property in the future. If you are able to put forth the startup costs, buying land for the purpose of residential use is also a great route for investing.
Whatever route you take, be sure to consider your unique wants and needs, as well as your immediate strengths and weaknesses. The game of investing in real estate is all about knowing your limits and making savvy choices. For more information, we encourage you to check out our commercial sales and marketing page, or feel free to contact a representative with First Federal Realty DeSimone today at 702-990-8660.