When someone is looking to define the difference between residential and commercial real estate, the most important thing to help you remember is to consider what the property is being used for. If the primary use is going to be to reside or live in, it is residential property. When the primary use of the property is going to be for profit or to make money, the building would be commercial, even if the owner resides there (with a few exclusionary factors). Its always best to check with a real estate attorney if you are unsure, but if your main purpose of buying a property is the pursuit of income or business, it is like commercial property, which has it its own sets or ordinances and tax laws that you need to be aware of in whatever state and county you reside in. Let’s take a look at three common types of commercial real estate.
Three Popular Types Of Commercial Real Estate
Retail sounds exactly like it is – the exchange of goods for money. This could include storefronts, a strip mall, an entire mall, outdoor mall, outlet center, storefront, or more. Sometimes restaurants are included in this category, because it’s a rare strip mall or retail center that doesn’t have some type of restaurant located in it. Usually, if there are multiple stores in a strip mall, there is a lead store that does the majority of the advertising and brings in the most traffic. This could be a popular restaurant.
Office space could be anything from law offices, medical offices, urgent care centers, daycare centers, accounting services, even your local real estate agent! In large cities, very large corporations may inhabit massive areas in tall buildings (such as major banks or financial institutions). In smaller towns, office space could be a massage therapist, a tattoo artist, and a lawyer in the same building. In truly depends on building codes and town culture.
Multifamily refers to rental/tenant type situations – usually, apartments or townhomes. As long as it two dwellings connected together, it could qualify as commercial real estate. If it is one home you are buying to lease/rent out, it is not a commercial property, it is still a residential property. Multi-family units can be high-rise building with elevators to four-unit townhomes in the country.
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