Post about "Real Estate"

Investing in Real Estate – Should You Buy Residential Or Commercial Property?

We hear this often from real estate investors: “What’s the smarter move? Residential or commercial investment property?” It should come as no surprise that there isn’t a one-word answer to this question. You’ll arrive at your best choice — the one that maximizes your chances for success — by working through a decision process that includes some “global” issues, some local and some that are entirely personal.DefinitionsLet’s start with some terminology. For the purposes of our discussion, we’ll define as residential any property that derives all or nearly all of its income from dwelling units. Single-family homes, multi-families, apartment buildings, condos, co-ops are all residential. (FYI, the tax code classifies any property in which 80% or more of the gross income comes from dwelling units as residential, so many mixed-use properties can be classified as residential for tax purposes.)For commercial property, we’ll use a typical layman’s definition: property that derives its income from non-residential sources, such as offices, retail space and industrial tenants.Why do I say that this is the layman’s definition? Because appraisers and lenders would consider large (>4 unit) apartment buildings to be commercial investment property since they are bought and sold strictly for their ability to produce income and not as a potential personal residence for the owner/investor. However, it will suit our discussion better to treat all apartment buildings as residential properties.Global IssuesWhat are the global issues that should affect your choice to buy residential or commercial property? The state of the U.S. economy certainly tops the list. If you believe we are in or are on the brink of a recession, then it makes sense to be cautious regarding commercial property. You will have to rely on businesses to occupy your commercial space, and if they’re struggling to survive or simply deferring their plans to expand, then rental rates may soften and demand for space decline. Replacing a lost tenant — especially one lost unexpectedly (in the middle of a lease, or the middle of the night) because of a weak economy — can take longer than it might in unstressed economic times. When the economy and employment are strong, of course, you are likely to see the opposite. Service businesses need more space, retailers open more stores, distributors need more warehouses.Another issue is the cost and availability of financing. Interest rates are always important to investors, but there is one situation that may strike you as counter-intuitive. When home loans are readily available and mortgage rates drop, it’s not uncommon to see an increase in apartment vacancies, making apartment buildings less desirable as investments. The reason? Low mortgage rates and easy credit often mean that individuals can own a home at a monthly cost that is the same — or less, after taxes — than renting. So part of your potential tenant pool may be lost to home ownership.Local IssuesIn the real world, each of these global issues comes with a “however” attached. You need to stay on top of your local market because that market may contradict the national trend. For example, highly restrictive zoning regulations can mean that commercial space is always in short supply in a particular location, recession notwithstanding. And the cost of single-family homes in your community may be so high that there will always be a strong demand for rentals. Think globally but act locally (with apologies to environmentalists for borrowing their slogan).Personal IssuesYou could buy a property and then insulate yourself from it by turning over every aspect of its operation to a management company. But if you’ve never operated a property yourself, how would you know if the management firm is doing an acceptable job? Most investors begin as hands-on managers and your chances of success will be greater if you choose a type of property that you’re comfortable with.So, at the personal level, will residential or commercial suit you better?Unless you were raised in the woods by wolves, there is a very good chance that you’ve spent most of your life in a residential dwelling unit: a single-family house, a condo or an apartment. You have a first-hand understanding of the rights, obligations and appropriate behavior of a residential occupant. If you were a tenant, you probably also know something about the roles and responsibilities of both tenant and landlord. It is for this reason that first-time investors often lean toward buying a small residential building. You may not know the fine points of leasing and landlording, but you understand the basic ground rules. This is familiar and comfortable territory.Of course, some novice investors come to real estate with a background in business and perhaps as a commercial tenant. If that description fits you, then becoming a commercial landlord may be an easy transition. You already have firsthand knowledge of how commercial lease deals come together, and what the parties typically expect of each other.The Pros and the ConsLike any of your investment choices, each type of property has its pros and cons. For example:Residential Pros:1. Residential units are generally easy to rent. Turnover in housing is high, so your pool of potential tenants tends to be large.
2. Leases are generally short, especially for apartments, so you can keep pace with the rental market. This means cash flow tends to be fairly strong with a multi-unit residential property.
3. Financing residential property is usually fairly straightforward. For smaller properties, the process is similar to financing a home.
4. The cost per unit tends to be lower for residential than commercial. The more units you have, the less likely it is that a vacancy will severely impact your cash flow.
5. You could live in one of the units of a multi-family property. Obviously it’s easier to keep an eye on the property if your eye is actually there.Residential Cons:1. Residential properties usually require a lot of hands-on management.
2. Residential properties usually require a lot of hands-on management. (That’s not a typo. I said it twice.)
3. With a single-family home, one lost tenant equals 100% lost rent.
4. Multi-family houses tend to be older and therefore may require more repairs and maintenance.
5. Residential tenants don’t keep office hours, so you can get a call or complaint at any time of day or night.
6. Larger multi-unit properties generally have a lot of traffic in common areas and will require greater upkeep.
7. Did I mention that residential properties usually require a lot of hands-on management?Dealing with commercial tenants is quite different. Ideally, it’s business, not personal. You may require a personal guarantee on a lease, but you should expect to have more of a business-to-business relationship.Commercial Pros:1. Typically leases are longer, with built-in rent escalations. Five years, with options to renew is not universal but certainly quite common. Except perhaps for small offices, few businesses would be willing to go to the expense of becoming established in a particular location without a guarantee of more than just one year.2. Many commercial leases pass through to the tenant a pro-rata share of certain expenses (or a pro-rata share of the increase in certain expenses, over a base). For example, the tenant may be obligated to pay its pro-rata share of property taxes and common-area maintenance. This helps stabilize the cash flow for the landlord and makes that cash flow more predictable.3. Management is less hands-on than with residential. Renewals are less frequent. Many commercial leases are written to include the requirement that the tenant be responsible for interior repairs, HVAC maintenance, glass breakage, etc.4. Depending on the type of space (i.e. more common with retail and high-end office), the tenant may fit-up the space to suit itself. The landlord may give a one-time fit-up allowance or a period of free rent, but the interior finish then becomes the tenant’s responsibility to maintain.5. Because the property’s value is strictly a function of its income stream, you have the opportunity to create value by enhancing that income stream. In other words, you don’t need to rely on general market “appreciation” to increase the value of your property, but can take steps to do so yourself.Commercial Cons:1. Trying to purchase a commercial property on a shoestring may not be a realistic plan. Lenders are generally tougher underwriting commercial loans, especially if you have no experience operating commercial property. Down-payment requirements tend to be higher, as do interest rates. Loans are for shorter terms and often have a “balloon” requirement (i.e., must be refinanced before the nominal end of the term). The property will have to pass muster in terms of its projected cash flows and debt coverage ratio.2. Leasing a commercial space can take much longer than leasing a residential unit. After a tenant is identified and basic terms agreed upon, it is usually necessary for attorneys for both sides to negotiate the language of the lease. The complexity and cost of this process can vary greatly, depending on whether you are dealing with a local or a national tenant.3. Filling a vacancy can take much longer than with a residential unit. Commercial leases will typically require that a tenant exercise an option to renew well before the lease expires — perhaps six to as much as twelve months prior — so that the landlord can have ample time to look for a new tenant.4. Financing commercial property can be more complex than with residential. You’ll need to demonstrate to the lender that the property will perform at a level that can can cover the debt service with room to spare.5. If you don’t have experience being a commercial tenant, then becoming a commercial landlord may require that you get familiar with some concepts and skills that are particular to the commercial world. You’ll want to learn about “tenant mix” if you own retail space, about commercial insurance and about the billing and reconciliation of pass-through expenses.While there is certainly no right answer to the question, “Residential or commercial?” there is probably a best answer for you. Do you want the hand-on involvement of residential? Do you have the resources for commercial? Do you want the potential for higher cash flow, and with it the possibility of greater risk? Do you prefer a more modest but more predictable return? Consider your objectives and preferences carefully, and evaluate your resources — time, money, skills — realistically. With a bit of luck, the answer should jump off the page.

Top 10 Handmade Wooden Duck for Home & Garden Decoration

Ducks are one of the symbols that reflects love. Wooden ducks are finely carved, created, and designed for a striking look and sense nicest for home and garden decors. These ducks are handmade with precise and skilled craftsmanship on wood with hand-painting with special colors. Just a little care needs to be taken for tidying up. Clean the wooden articles with a sponge or cloth using a mild non-detergent soap and water and clean them dry. Abrasive cleaners or scrubbers should not be used, and they can pale the look of the wooden item.

Painted duck statues for garden lawn or yard decoration handmade wooden craft.
The materials, paints, and pigments used for making it are eco-friendly, non-toxic, and safe. It is a cute duck-shaped wooden article perfect for home, lawn, garden, and party decor. This makes the home and garden look thoroughly beautiful and fascinating. It may come in different sizes according to the customer’s requirements.
Wooden ducks crafts ornaments desktop decoration for home party
It is made of wood crafted beautifully, giving a cute and unique look. It has a realistic shape, and the handcrafters had given the wooden duck’s excellent details with fine skills. It is purposefully suitable for garden, office, home, office, and desktop decoration. It makes the mood refreshed and brings happiness to daily life. It is also a great gift for children, friends, or lovers.
Zoltamulata handcrafted wooden duck pair showpiece for home interior decor ducks
These ducks are made up of good-quality wood material. It is certainly suitable for home and car too. This makes the home look better and greatly enchanted.
Wooden Hand-Painted Ducks
The Rajasthan artists are greatly skilled in the handcrafting of wooden articles. This is one of their articles beautifully hand-painted and carved. This is suitable and beautifully embraces a comfortable corner of the office or home.
Wooden Duck Home Decor
This is a fascinating and beautifully detailed design made up of wood. The details in the duck are very well shown. Though it is not painted, it gives a rich and royal look to the home decor.
Klowage Duck Decorative showpiece
This is enormously best for home decorative purposes. It is completely made up of wood and comes in multicolor according to customers choice. It gives a little vintage theme to the home. Looks great and has a great impact on people.
LAVANSHI 4″ Kadamba Wood Duck Decorative Showpiece
This wood duck showpiece is extremely ethnic and authentic. The artisans have precisely given the minute details, making this woodcraft a masterwork. It is suitable for the home decor purpose giving a delightful look to the home.
3√óRustic Style Duck lovely nautical wooden duck set photo prop table shelf display home decor
These highly detailed handmade duck models are very fascinating and elegant. They are well-crafted and carved with details. It is colored and feels cute to be a part of home and garden decor.
Handmade Ducks by DCUK
This handmade duck is so much more than just a decor ornament. It is made up of wood with specific details unique from most other handcrafted wooden duck decors. It is perfectly sculpted, and the hat and boots make it more attractive.
Wooden Birds Gift Set
This can be used for home decor or garden decor purposes. It could also be gifted to loved ones. Just protect it from water and dust with a small cotton hand broom to remove the accumulated dirt.
The wooden duck articles are perfect for your garden decor and home decor. It gives the place a unique and new look. We also provide the best handmade wooden duck decor for home and garden decor purposes. The painted wooden ducks with boots are specifically good and prominent at our place. You can also buy the best duck models from us at a reasonable price and more offers.