Should i commercial

Advertiser Disclosure We do receive compensation from some affiliate partners whose offers appear here. Millionacres Logo. Tax Deductions Depreciation Capital Gains. New York City Denver Philadelphia. Local Real Estate News. Research Real Estate Glossary. Podcasts Webinars Videos. View Memberships. Search For. Residential Investing: The Upsides. Familiarity Most people are more familiar with residential property than with commercial property; after all, people live in residential property, which could be a single-family home , condo, townhouse, duplex, triplex, or quadplex.

Higher level of difficulty Commercial property has challenges that residential doesn't, such as maintenance.

Cost of entry It's usually more expensive to invest in commercial real estate than in residential: Buildings cost more than single-family homes. Risk Commercial real estate investing is generally riskier than residential. Commercial Investing: The Upsides. What is residential real estate? What is commercial real estate? How do they compare?

Which is the better sector to start in? Argument can be made for either side, but commercial often shines Commercial real estate may take a bit more time to learn up front, but the long-term rewards and ease of management can make it an ideal way to start your investing journey. Limited hours of operation. Businesses usually go home at night. In other words, you work when they work.

Barring emergency calls at night for break-ins or fire alarms, you should be able to rest without having to worry about receiving a midnight call because a tenant wants repairs or has lost a key. For commercial properties, it is also more likely you will have an alarm monitoring service, so that if anything does happen at night, your alarm company will notify the proper authorities. More objective price evaluations. It's often easier to evaluate the prices of commercial property than residential, because you can request the current owner's income statement and determine what the price should be based on that.

If the seller is using a knowledgeable broker, the asking price should be set at a price where an investor can earn the area's prevailing cap rate for the commercial property type they are looking at retail, office, industrial, and so forth. Residential properties are often subject to more emotional pricing. Triple net leases. There are variations to triple net leases, but the basic concept is that you, as the property owner, do not have to pay expenses on the property as would be the case with residential real estate.

The lessee handles all property expenses directly, including real estate taxes. The only expense you'll have to pay is your mortgage. Companies like Walgreens, CVS, and Starbucks typically sign these types of leases, as they want to maintain a look and feel in keeping with their brand, so they manage those costs, which means you as an investor get to have one of the lowest maintenance income producers for your money.

Strip malls have a variety of net leases and triple nets are not usually done with smaller businesses, but these lease types are optimal and you can't get them with residential properties. More flexibility in lease terms. Fewer consumer protection laws govern commercial leases, unlike the dozens of state laws, such as security deposit limits and termination rules, that cover residential real estate. While there are many positive reasons to invest in commercial real estate over residential, there are also negative issues to consider.

Time commitment. If you own a commercial retail building with five tenants, or even just a few, you have more to manage than you do with a residential investment.

For example, Internet video ads can range from less than 1-second to much, much longer. Most North American broadcasters now allow advertisers to choose between producing 15, 30, or second commercials. While advertisers and media strategists are always experimenting in the TV ad space to ensure that commercial lengths remain profitable according to the spend necessary to produce and broadcast them, network TV still adheres to the mold of traditional time blocks. In some cases, more concise ads are exactly what you need to hook your viewers and convince them of your value proposition from the outset.

On the other hand, some commercials need a slow-burning, established plot to do the trick. Many holiday TV commercials deliver on this style. No matter the length, the important part is that you take just the right amount of time needed to tell your brand story—no more, no less. Studies completed by the World Advertising Research Center have shown that second spots are ideal in order to effectively tap into all three components of a good brand-building television commercial.

With that said, the appeal of producing and airing commercials that are longer or shorter than 30 seconds is justified. As we said above, though, choose the length that makes sense for your product, intended message, and budget. Even more genius is the use of the same Storyboard to create a second ad spot from the same commercial! Progressive Insurance capitalizes on the cultural moment their audience is experiencing—the year of and all the developments during and after it.

Corporate communication platform Slack showcases how their tool can help your workplace be more productive. The second format works best here since it allows the audience to follow along the journey and storylines of the characters to better sell you on the efficiency of their product.

Plus, the velvety voice over at the end wraps up the adventure perfectly. The cost of purchasing 30 seconds of airtime to broadcast your commercial can vary tremendously based on the programming that your commercial is going to be sandwiched between. Replacing the roof or the HVAC system of commercial property for example is far more costly than the same repairs on a residential property.

Having a capital reserve and contingency fund is a must. While the hefty upfront cash investment can be out of reach for some investors, there are more passive options to investing in commercial real estate without outright purchasing properties. Peer-to-peer real estate crowdfunding allows you to pool your money with other investors and the ability to open a portfolio with a much smaller initial investment.

Similarly, REITs Real Estate Investment Trusts describe a company that invests in a portfolio of real estate projects and distributes earnings to its shareholders. There are several types of REITs: publicly traded, publicly non-traded, and private, each with its own set of regulations.

While REITs are a hands-off way to invest in commercial properties, investors have less control over the types of properties invested in or when they can access their money. Investing Strategies. Category: Investing Strategies. Looking to Sell?