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Tampa Real Estate
Commercial real estate can be used for a number of purposes, and it can be a fantastic investment. There are many fantastic investments available for commercial real estate in Tampa. However, many people are put off from this type of investment because they lack the knowledge. You can learn more about the essentials of commercial real estate below.
Essentials of Commercial Real Estate
As the name suggests, commercial real estate is only used for commercial purposes. This can include everything from small retail shops to huge malls, office spaces, restaurants, and much more. This type of investment can be lucrative because it provides investors with regular income as well as potential appreciation on equity. They own a physical asset that can substantially increase in price for the long term, whilst also providing a long-term income. The consistency of this income and the specific pricing can depend on the economy and local factors that influence the real estate market.
There are four main classes of commercial real estate. The highest class is known as Class A, and it refers to properties that are in excellent condition and in a prime location. Class B buildings tend to be older and located less competitively. However, they can be a good value option for investors looking to do restoration work. Class C buildings tend to be over 20 years old and require a fair amount of maintenance.
Leasing Commercial Real Estate
In some cases, the business owner may also own the property outright. However, it is far more common for them to lease the business residence. The investor of the property will be able to collect regular income in the form of a lease agreement. These agreements tend to be contracted for the long-term. It is not uncommon to see five years and even ten-year leases. An advantage for the investor is that they are guaranteed long-term income; however, longer-term leases make it difficult to get new tenants in case the market leads to higher prices.
The length of the lease tends to be related to how much area is in the property. Tenants with large space requirements tend to have longer leases to lock in the price and also to ensure that they can secure the property for long-term use. It may not be so easy to find another property with the same characteristics in the best location.
Commercial Real Estate Management
Investors will need to decide whether they are ready to be a full-time landlord for the property. There is a lot of time and effort involved in the management of a property and many responsibilities. The changing of tenants can be costly since the space may need to be changed drastically due to different types of businesses. Therefore, many owners opt for a professional management team to take care of things. They can handle the process of finding high-quality tenants, collecting rent, maintaining the property, and keeping it competitive. Additionally, they will have specific legal expertise that can help to resolve disputes in an efficient manner.
Types of Commercial Property Investment
There are many routes to commercial property investment in Tampa, and you don’t need to be an outright owner to get involved.
Direct Ownership
Outright ownership means direct investment in the property. This can be financed through a mortgage. This is the best option for those who are experienced in property investment, and also familiar with the local area. Owners must properly understand the risks that come with property investment.
Other Routes to Investment
Investors can also get involved in commercial property investment through securities such as REITS, exchange traded funds, or through directly investing in companies that are involved in the commercial property market. These can be less riskier options, and they require far less capital, but the potential returns are also lower. For all types of investment, commercial property tends to be attractive since it allows differentiation in a portfolio.
Benefits of Commercial Property Investment
In Tampa, there are many commercial properties in prime locations that have the potential to provide significant returns in the long-term. They are a way of attaining a long-term stable cash flow, and this type of investment can provide excellent diversification for a portfolio.
If you’re interested in commercial property for sale in Tampa, then it is vital to pick an experienced real estate agent. Viewpoint Realty has an excellent understanding of the local market, and we can guide you through the commercial buying process to ensure that you make the right investment. Contact us on 727.584.7355 or send an email to viewpointrealtyinternational(at)gmail(dotted)com.