Investing in Commercial Property

Many people invest their money into commercial properties. A commercial property is any property which is owned and operated in order to make a profit. So, buildings like malls, restaurants, bookstores, banks, doctor offices and apartment buildings are all considered commercial properties. If you’re thinking about buying a commercial property as an investment, there are things you need to know before you spend your money.

Commercial properties are all around us. Development, construction and maintenance of commercial properties is a huge industry in our country. Most people who think about buying a commercial property as an investment are thinking about buying a residential property with enough units (separate apartments) to qualify as commercial in nature. When the number of units on the property reaches the legal threshold, as dictated by your state, city, or county, you, the property owner, will enjoy different options when it comes to borrowing and taxes. You will also have different responsibilities as well. For example, when it comes to profits made from your investment in a commercial property, you will now be paying a capital gains tax on that profit. Capital gains taxes operate under different tax regulations than income tax, which is what most people are used to paying. If you are buying an actual commercial building, you will be subject to different local zoning requirements, which are usually quite strict and particular.

In terms of profit stability, buying a commercial property is often a smart thing to do. Millions of Americans are losing their homes through foreclosure, and need a new place to live. Because of this, rent prices can get stronger when times are tough.

If you’ve got some money you’d like to invest in a commercial property, be sure to explore all the legal aspects of the transaction with a financial adviser.