There are a lot of unknowns in the commercial real estate industry. One of the biggest ones is landlords. It’s important to know what type you’re dealing with before making any type of investment.
Commercial Real Estate Industry
First of all, commercial real estate investing is different than other types of real estate. A commercial landlord rents out retail, industrial, and office space.
It’s possible that you will find yourself in a situation where you have to hire a lawyer for dispute resolution. In these scenarios, you’ll have to know what type of landlord you’re dealing with.
Types of Commercial Landlords
A retail landlord specializes in renting out retail spaces such as shopping centers. They are responsible for maintaining common areas and all the other duties that come with being a landlord.
There are many more than four types of commercial landlords, but these are the ones you’re most likely to encounter.
These landlords pool their resources to buy a property that they think has potential. It might be a neglected building in an upper-end area. From there they put in time and effort to renovate the place. If they’re good and follow common guidelines, they will be able to make a profit.
When renting from these landlords, be aware that it’s common for them to hold onto the property for a year then sell it for a profit and move on. You may end up with a different landlord than you originally thought.
A professional company isn’t usually a single landlord. It’s a business that buys, develops, and rents multiple commercial properties.
In addition to owning the properties, they also tend to manage them by creating their own internal management service.
Mom and Pop
Someone who comes from a wealthy family or has accumulated commercial property might decide that becoming a landlord is the best way for them to turn a profit.
In general, they are more involved than a larger company and are easy to deal with. They’re fast to solve complaints and handle any repairs.
This works in a similar way as professional companies. The difference is that an institutional landlord includes insurance companies and banks.
Commercial real estate tends to be a safe investment. Because of this, an institutional landlord will be pickier about their tenants. They can afford to leave some of their space vacant until someone better comes along.
Learn More About Real Estate
Investing in the commercial real estate industry is a complicated process. You need to do a lot of research before you make any final decisions. Looking into the landlord of the property is vital. The landlord impacts so many aspects of the property. That also includes how much it will earn. Find out which type works best for your needs and invest accordingly.