Which is best, Commercial real estate leasing or buying? (Pro's & Cons of both)?
79604
Situational... \n\nIf you do choose to buy you will get equity over time and don't have to worry about mortgage rates inflating (unless you have an adjustable rate), you can also deduct some of your mortgage and real estate taxes, which you are unable to do otherwise unless you exceed the standard deduction. Depending on the rates, payment, market cycle etc. it can be better to take your mortgage and invest in mutual bonds and the stock market which sees a long term return of around 8 percent. Buying is not necessarily something you should do for the investment as there are other ways to get higher returns on your money *and often more reliably*. \n\nIt is probably not a good time right now to buy; right now it is generally a sellers market I think, as prices have recently been exploding all over the world. I’d save your money at this time and when the market cycle ///demand for houses drop and poeple are willing to sell for less, and then is a good time to buy and wait for it to turn into sellers market again to get a return on ur investment. \n\nLease for now and buy when the market stabilizes is probably going to be the best for you, but then I don’t know your situation.
193898
If you are refering to zoning then you will need to ask the zoning or planning department in your city or county if you can do what you want to do.\n\nIf it is because of a homeowners association and they forbid "commercial business" then you better check with them as you will just have headaches later for not finding out and wasting time if you indeed couldn't.\n\nNow what you are renting will make a difference. If you are talking about a house, apartment etc, then as long as the zoning is cool you can do it. If it is a part of your home (duplex, triplex etc) then its not going to be considered commercial if you are just renting out the extra units. If you are talking storage units then yes that would be considered commercial.\n\nthe zoning is the key, call them up and ask lots of questions
1047746
Nothing personal BUT I dont agree with the comment to hold a property for a short term. A true investment in Real Estate is one that is held for profit in the long term.\n\nIF you are a speculator or flipper (which sounds like you are not) you might want to becareful. This is not the right market to be doing that.\n\nAll in all SFR are less hassle because you dont have to take care of multiple unit problems and problems between the tenants but of course you have the benefit of better cash flow in Multiunits. So it's really what you are trying to accomplish with your INVESTMENT!.\n\nGood luck
449406
Leasing=eventually you will own the property at the end of the agreement\nrenting=you're paying for the right to live in someone else property\n\nsometimes apartment complexes use the terms interchangeably
1094143
Buy on land contract, or rent-to-own.
24208
I agree with Angel. \n\nIt depends if you like living in CA...\n\nBuying is always better if you can afford to. You will build equity in your home and also enjoy nice tax breaks. It's basically "forced" savings :)\nRenting is basically paying someone else's mortgage. \n\nIt's always better to buy the smallest home in the best neighborhood...as opposed to the best house in the worst neighborhood.
218073
Without a doubt, it's best to buy if you can.  Paying rent is paying someone else's mortgage for them.  Better to pay tax deductible interest to the lender than to just give money away to a landlord.  Many mortgage companies collect property taxes as part of your mortgage payment, and you can have the payment charged directly to your bank account - don't have to remember or ever be late.  Just have to make sure there's enough money for the mortgage, figure out ahead what your bills will be, such as utilities, food, car payment, etc.  Years later you probably can sell your house or condo for more than you paid, it's like having lived there for free.
927369
Working capital. The most important facet in considering purchasing commercial property is how it affects the owner's working capital. The initial investment of the purchase can impede the business' working capital, restrict expansion opportunities and affect the business' ability to operate during an economic downturn.\n\nFunctional obsolescence. Over time, business processes change and demands fluctuate. A building may become functionally obsolete if operations change due to advances in technology or other factors. Likewise, if the workforce size increases, space configuration requirements may change, necessitating significant investment in a building's reconfiguration. Therefore, it is important to consider a building's construction and its flexibility when it comes to remodeling.\n\nEconomic obsolescence. Does the building have enough size and amenities to reflect the company's image? Does the age of the building affect the ability to produce revenue in concert with the company's projected growth?\n\nDemographic obsolescence. Factors that affect the desirability of the location can change the value of the investment. Deteriorating neighborhoods can raise employees' concerns about safety and security and require unforeseen costs of protective services and, ultimately, lower the market value of the investment. Changes in nearby roadways and public transportation may make it more difficult to attract desirable employees. If the business owner plans to sell the company in the future, demographic obsolescence can create a significant decrease in the value of the business.\n\nAppreciation of value. Short-term economic fluctuations aside, historically, buildings in the Austin area have appreciated at an average of 3.5 percent per annum. Also, keep in mind that a portion of the mortgage payment is debt service, and the owner's equity in the building increases as mortgage payments are made on the property.\n\nTax advantages. The depreciation expense connected with the value of the building is a reduction of ordinary income, up to 40 percent, assuming the owner is in a 40 percent tax bracket. At the time of sale or disposition, the owner is taxed on the recapture of the depreciation as a long-term capital gain of 15 percent. In actuality, taxes are not paid on the difference between the depreciation and the long-term capital gain, which, in this case, would be 25 percent -- a significant savings for the owner.\n\nHedge against inflation. Building ownership secures a guaranteed cost for occupying the location of choice. As building replacement costs for a like kind and quality increase, rental rates increase as leases renew. However, these increases are circumvented if the business owner also owns the location. Furthermore, as the replacement costs increase, so does the value of the building.\n\nControl of property. Along with the pride of ownership, a business owner who owns a location is able to control the unique value of the property -- for example, signage, expansion opportunities, level of maintenance and improvements. Additionally, the owner determines the building's rules, such as hours of access, air conditioning usage and types of businesses that may occupy a portion of the building.\n\nTo ensure a smooth experience, prospective buyers should put together an acquisition team. Buyers will need a certified public accountant to analyze the viability of the purchase, a source to secure financing options, a real estate broker to locate properties, and a real estate attorney to draft the offer and evaluate and approve closing and loan documents.\n\nAlso, it is imperative to have a structural engineer and specialty contractors conduct inspections of the building's structural, mechanical and exterior systems. An architect should be enlisted if remodeling is necessary.\n\nProfessional guidance in purchasing a commercial facility can make the difference between a rewarding experience and fi
1105345
What kind of land are you looking for?\nbelow is a link to an excellent resource where you can find commercial real estate.
364240
Owning a house is the best from an investment standpoint. Condos are pretty good too although the market is different. They don't increase in value as much, you have to pay an extra monthly fee but you don't have to worry about taking care of the outside. Renting is money out the window but you may want to consider it first so that you can really take your time and look over the housing market in the area you will be going.
652705
Above answer is correct. If this is an income property, me as a buyer rather buy a property that is making money rather than after the purchase look for a new tenants and advertise, screen tenants etc. Property is attractive if you show cash flow and if I can get cash right after purchase from rents. Always a good thing.
436242
I think most of the no money down, subject to, and lease option stuff is crap.  Perhaps after you have gained experience you can get deals no money down.  I lived in a college town also and saw the same thing happening in my town.  Rentals were everywhere.  I got started in real estate as a birddog.  I made $500 finding leads for an investor.  $10/ per lead he didn't have to close for me to be compensated.  There are only so many investment opportunities in one market though, so now after much debate I am becoming a realtor. Then I plan on being a commercial broker and THEN an investor. It is gonna take a while. I really think that you need the money/ experience/ connections/knowledge before getting into such a heavy endeavor with such thick legal implications and even scarier liabilities/consequences. If you don't know what you are doing you can get hauled off to jail for 3rd degree felonies with that no money down garbage.  Besides that most single family homes make next to no cashflow, especially with the way interest rates are going up. HARD WORK HARD WORK HARD WORK!
1156053
Like any real estate investment, the answer is found in the 3 most important aspects of buying real estate:  location, location, location.  Is this dockominium in a high demand area?  Price is related to supply and demand.  Are there many other similar opportunities in the same area?  Just as important as whether it will increase in value is the consideration of whether it can produce any income to offset the costs of holding the investment.  Based on your answers you should be able to determine whether this is a good investment for you.
1073154
There are so many possible "pitfalls" that I can't begin to describe them here.  Most commercial leases I've seen are 30-40 pages of single-spaced typing on legal size paper.  That means an awful lot of possible pitfalls.\n\nI recommend that you have the lease reviewed by an attorney before you sign.  The attorney will explain each of the provisions to you and may be able to negotiate some of those possible pitfalls with the landlord.
708117
Great that you are planning such a wise investment path. I started exactly the same way many years ago. And I'm doing quite well now. My advise to you is go ahead and buy that duplex building. But rent both sides out instead of living in one side. Find urself a cheaper bachelor's apartment to live in. Likely you can get more rent from one of ur duplex than it cost you to rent a bachelor's. You will make more money each month because of the difference. \nYou may say that you only make $30,000 a yr.. but don't forget that when you go to the bank with a proposition to buy and rent the entire building out.. ur yearly income as viewed by the bank is now much more coz they will factor in ur potential income from the duplexes. This allows u a greater debt/expense ratio. and allows you to buy more. \nThere are other good reasons too for not being too quick to move into one side..  income tax for example, because u are not living in the building.. the entire interest on the mortgage becomes an investment expense. Also, it's likely that where you live.. there are better tax advantages to showing u are also a renter. \nIn time, as you buy more and more buildings.. you will be able to choose a house of ur own. But for now, make the most of "all" ur money, live below ur means.. and invest invest invest. \nImportant concepts to understand, balance and use to their most potential are; Ur networth, total assets, debt service ratio and income (both present and potential) debt service ratio is usually the most common limiting factor. ( and keep a watchful eye on interest rates) and know ur local realestate trends and be ur own best forcaster of future trends. As they say, "buy low, sell high"\nCoz in the end, most of ur money will be made on capital gain rather than rental income. ( rental income simlpy facilitates debt expense requirements from lenders )\nChoose a good banking agent.\nAs a realestate investor, ur bank becomes ur greatest partner. Choose an agent that has confidence in you, is knoledgable about realestate and is not afraid to stick his/ her neck out for you.\nBest of luck to you.
189298
buy buy buy  lease is basically renting the car. youll pay thousands of dollars towards a vehicle that doesnt belong to you. and then after the lease expires on alot of them they will require you to pay full retail value if you want to keep the vehicle.    if you decide to lease make sure your payments can be put towards purchase, if you want to keep the vehicle.   hope this helps
792011
Renting & leaseing are to different things, "renting" basically means month to month payments. Leasing is a pre arranged length of time you will be paying, Exsample ( you will be paying mothly for a year, or whatever length of time is prearranged)\n\n  Yes you will have to sign & date it, it would be a good idea to read it also.