All of us think about how to invest money in a profitable thing to guarantee a good living. So, many people think about investing in real estate as one of the profitable and safest fields of investment if we study it well. The real estate market is like any other market has profit and loss. So, before investing in it, one shall know what attracts the customers and how it to make use of it well. That’s why it is vital to differentiate between two main types of properties which are: commercial real estate and residential one. Besides, knowing the pros and cons of each type to be able to choose the type that suits you the most.
Commercial real estate means any property that is used for commercial purposes like offices and companies. It is not for any “living/housing” purpose.
From its name, it is clear that it is used in “living/housing” purpose. We use it to live in it; like apartments and villas. This kind of properties have nothing to do with the commercial purpose.
Investing in commercial properties have many advantages: like as an owner, you do not pay anything regarding fixing and installment as it is something for the tenant. Moreover, the contract is a long-term one (almost five years) which means a constant cash flow.
While the cons can be tackled as this kind of real estate needs a lot of money, so it is difficult to find tenants who can pay such huge rental price.
For residential properties, it is easy to find a tenant in compare to the commercial one as people used to search for a place to live in. So, in case of any economic crisis and the rental prices became low, it will still be rented as people will never stop search for a place to live in.
Concerning the cons, you will deal with the hassle of the tenants and their problems. Also, you will face lots of problems if the tenants do not pay the rental prices. Besides, you have to fix and pay for any damage that tenants do in the property if you are going to rent it to another tenants.
While taking the decision of investing in real estate, you have to know first some important information regarding the type of the properties; residential or commercial. Besides knowing the pros and the cons of each one to be able to choose the type that suits you the most.