Commercial Property Meaning
Commercial property as the name suggests refers to that property that is used by the owner or tenant for conducting business to profit from the business. Commercial property is always expensive than residential property due to many factors like limited availability or scarcity, high rent, demand and supply dynamics and so on. If you are one of those people who is thinking of purchasing or renting a commercial property then you should know some of the important features of commercial property –
Characteristics of Commercial Property
Location
The first and foremost feature of this property is the location because it is the location which decides the worth of the property, if the land or building is located at central business place of the city than its worth as well as rent will be more as compared to that property which is situated outside city or commercial area.
Multiple Use
Another characteristic of this property is that it has multiple uses, unlike residential property which can be used only for living in the house. Hence this property can be used to open retail shops, building shopping complexes, hospitals, warehouses and so on, in simple words the residential property is more like a desktop computer as its use is limited while commercial property is more like a smartphone as it has multiple uses.
Higher Acquiring Cost
The initial cost for purchasing this property is always higher and that is the reason why the majority of people prefer to take this property on rent rather than purchasing themselves. In simple words, the higher initial cost of acquiring the property results in fewer people purchasing this property which in turn results in higher rent for this type of property as demand for this property will always be higher than supply.
Parking Facility
Another thing with this type of property is that it should have proper parking space because if parking space is not there than customers are less likely to come which in turn will impact the business. In simple words just like a smartphone is not much of use without a charger in the same way commercial property is not much of use without proper parking facility.
Limited
Property for commercial use will always be limited because unlike residential property which can be made anywhere in the city as places for doing business is always in a limited area which in turn results in a higher price of the property as well as higher rent of the property in that area.
Agreement
In case of this property if you are taking property on rent than rent agreement assumes importance both for the owner as well as tenant because as far as the owner is concerned this agreement ensures that tenant vacant the property according to the agreement as chances of tenant not vacating the property are high in case of property for commercial use. As far as tenant is concerned he or she also needs to know beforehand the percentage rise in rent every year and also tenure for which he or she can occupy the property because if tenant business is successful and suddenly he or she is asked to vacate the property then it can be a big loss and that is where rent agreement can come to the rescue of the tenant.
As one can see from the above that commercial property has some unique characteristics and that is the reason why anyone thinking of purchasing or taking the property of commercial use on rent should carefully read the above points and then take the decision accordingly.