What Is Commercial Property? – Definition and The Tips

Commercial Property

Commercial property is something that has a high trading or buying value. Commercial can also mean profit-oriented.

In terms of property, there is the term commercial property. Which is a building organized with the aim of making a profit.

What Is Commercial Property?

Commercial property is a building that has a function as a place to make profit for the owner so that it can provide income.

In general, the property itself can be divided into two different types, namely commercial property and non-commercial (residential) property.

On the other hand, non-commercial property is property that is only used for personal use such as residential houses.

Commercial Property Type

Commercial Property Type

There are several types of properties that are included in the commercial class. In essence, property that is used as a place to seek profit for its owner, is included in the type of commercial property.

Here’s an example:

1. Shophouse

Ruko is a multi-storey building whose lower floor is used as a place of business or office while the upper floor is used as a residence.

The lower floor of the shophouse is used as a place of business or office while the upper floor is used as a residence. So with this function, shop house owners can directly supervise merchandise and reduce transportation costs.

Shophouses are often found in housing complexes or shops with a distinctive design and are similar from one shophouse to another. Generally, shophouses are built in a row, right on the side of the road and then form a block, or follow the road.

2. Lodging

This type of lodging building is made to meet human needs to move places by mobility or accommodation. The existence of the inn allows someone to rent it in some time. Examples of lodging buildings include:

  1. Hotel
  2. cottage
  3. Guest House
  4. Villa

3. Boarding House

The next commercial building is a boarding house or a service that offers a room or place to live with a certain number of payments for each certain period (usually monthly payments).

The boarding house is usually rented out by a pensioner with a large house that has many rooms because his children are no longer occupied. Currently the boarding house business is very loved by various groups.

4. Office

An office is a building where all business activities can be carried out. Usually, an office is a small room or room or a high-rise building.

Offices are often divided into two types, namely the head office which is usually the center of the company’s main location and branch offices.

5. Shops

Shops are areas where the sale and purchase of goods with more than one seller is referred to as a shopping center, traditional market, modern market, mall, plaza, trade center or other designations.

In shops, buying and selling of goods is common so that the perpetrators can make a profit.

Benefits and Risks of Investing in Commercial Properties

The main advantage when deciding to invest in commercial properties such as shop houses and others is the investment value. Which is much more expensive when compared to residential or non-commercial properties.

The main reason is because of the profit-oriented building designation for the owners, residents, and tenants of the property.

However, it should be noted that Pins must pay attention to other costs on commercial property, such as insurance, service charges, taxes, insurance, maintenance, and others.

What Is Industrial Engineering?

But just like buying a house, investing in a shop or home office also has its own risks. Explain that even though they are in the same location, commercial property units usually offer higher selling prices and rental rates than residential units.

In terms of the lease term, owning a commercial property can be advantageous. Because it is usually rented for the long term as it will provide a guaranteed place of business for their business.

There is an assumption that buyers of commercial property must be very rich people, while those who are not too rich can only buy residential properties.

Just like residential properties, commercial type buildings can also be used as collateral to banks. However, commercial property loan ratios are usually not as high as residential properties.

Generally, banks will only lend up to 60% of the value of commercial properties. In addition, if the commercial property is vacant, its value is not as high as when it was occupied.

Tips Before Buying Commercial Property

Tips Before Buying Commercial Property

Commercial property prices are greatly affected by general property market conditions. When Pins wants to buy and invest in commercial property, it’s best not to act rashly.

Let’s look at the following tips:

1. Choose Location Carefully

The choice of location when buying commercial property must be done carefully, you know, Pins! Because, later this location will become a destination for people to carry out commercial or buying and selling activities.

It doesn’t have to be in the city center, the most accessible to public transportation such as city buses, toll roads, or train stations, can be reached easily.

2. Use Logic

It is important to involve logic when deciding on a commercial property unit. Because the property that Pins buys will later become the company’s assets.

If the business is still on a small scale, Pins can try to rent a shophouse or just a business space. Uncertainty in financial management should be a major consideration before being ready to buy a property unit.

3. Survey Before Buying

Although finding units is now easier with the advent of technology, it is still important to conduct a direct site survey. Do not just rely on research results browsing on the internet alone.

If necessary, Pins can first consult a construction expert to check the overall condition of the building

4. Make a Budget Carefully

Buying a commercial property unit must be considered carefully. As much as possible, the budget for buying property is tailor-made. As a commercial building owner, Pins must be prepared to face extra costs, especially taxes that are imposed from time to time.

If Pins buy on credit, take advantage of promos from banks to Commercial Property. Pins can also take advantage of several banking promos that offer low interest rates in their mortgage installment program.

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