Miami Commercial Real Estate 101: Learning the Ropes
The common mistake most first-time investors make when choosing a Miami commercial real estate property, or during the initial phase of business planning, is thinking that these properties are limited to—even sometimes, solely about—apartment rentals; Apartments and condos are just one part of the big world called, commercial real estate. And although this misconception is hardly a taboo in the real estate world, there is no greater sin in business planning than choosing the wrong property to house the startup; not to mention that it could potentially lead to future headaches, which might take a toll in your wallet.
So before expending some resources on the wrong property, familiarize yourself with the common types of investments in the Miami commercial real estate market. Always remember that knowledge is power.
Residential Properties or Apartment Buildings
These are the most common types of commercial real estate property. Residential properties run the gamut of apartment types: small apartments that contain more than five units, and multi-story apartment buildings.
Also include offices; these investments are great lures for people and companies that are downsizing. Apart from profiting through rental payments, tenants also pay for taxes, insurance and maintenance.
These are similar to warehouses and offices but leased on a long-term basis. They typically include shopping malls.
Resorts and Hotels
These are on a different level from the aforementioned investments. Many categorize resorts and hotels are businesses rather than investments because they require maximum involvement.
This is probably the most popular type of commercial real estate property even to small investors. Land development provides wide- ranging business opportunities aside from having inherent value-increasing capabilities.
These are the most common types of Miami commercial real estate properties. There are others but many argue that these belong to either one of the above investments. Nevertheless, it is still important to know these additions, which are: Health Care Facilities, which include nursing homes; and Mobile Home Parks.
Now that you are fully aware of the types of commercial properties that you can lease, it is the time to know what types of lease govern these investments. Although there are quite a number of lease options, consider the following your introduction to commercial leasing:
- In a Gross lease, the renter pay an amount previously set by the landlord. In this type of lease, the landlord is responsible for paying the insurance, taxes and maintenance or repair fees.
- In a Net lease, the tenant, aside from paying the rent, pays a percentage of the maintenance costs, insurance and other expenditures entailed in the property.
- In a Triple-net lease, the tenant pays of the rent, as well as the insurance, taxes and maintenance or repair fees.
- Shopping center lease demands the renter to pay the base rate in relation to the facility’s square footage. Also, the tenant pays for other charges in the facility and a percentage of the gross sales.
- Ground lease allows tenants to lease the land and build property on it. This lease also typically entitles the landowner to own all the improvements made on the property at the end of the lease period.
Consider yourself fully-equipped and informed after knowing these simple, but important, facts regarding leasing a Miami commercial real estate property. Although this information can help you make your way through the leasing process, it is your task to research further in order to reach the finish line.