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Commercial and Residential Real Estate Michigan

A breakdown of what commercial and residential real estate is and how the two types of property differ from one another.

Local Companies

McPherson Mansion
810-599-5147
915 Michigan Ave.
Howell, MI

Cascade Realty Commercial
517-787-4557
PO Box 1728
Jackson, MI

Three West, LLC | Commercial Real Estate & Consulting
231-929-2955
4020 Copper View
Traverse City, MI

Naterra Land
(906) 358-4045
4692 US 45
Watersmeet, MI

Malan Realty Investors
(586) 741-0453
33822 S Gratiot Ave
Clinton Township, MI

Fodor Sandy
(734) 429-2200
212 E Michigan Ave
Saline, MI

Tdn Real Estate Appraisals
(810) 244-6444
6070 Fenton Rd
Flint, MI

Graham Thomas
(231) 526-6573
187 E Bluff Dr
Harbor Springs, MI

Fox Real Estate Inc
(906) 644-2134
9237 00.25 Rd
Cooks, MI

Rea Realty Group
(586) 336-7342
71050 Van Dyke Rd
Bruce Twp, MI

Adapted From: Success as a Real Estate Agent For Dummies

Comparing commercial real estate to residential real estate is like comparing apples to oranges. Both are from the same genre, but that is where the similarities end. The following are general descriptions of the two types of real estate:

Commercial real estate is business-focused. It involves property that is sold, leased, or used to achieve a predetermined business objective. It's used as an investment to achieve an anticipated rate of return on the funds invested.

Residential real estate revolves around the wants and needs of a homeowner and his family. It involves property purchased for individual use, most often to provide housing for families.

The selling process for commercial real estate hinges on numbers and return-on-investment calculations. Residential real estate is nowhere near so cut-and-dried because it's more of an emotional purchase. Many buyers make decisions based on the fact that the house just feels right to them. The key factor is the return on investment.

What is residential real estate?

Residential real estate is focused on personal use. For the most part, residential agent's represent the buyers or sellers of single family, primary homes. Within the residential real estate arena, agents also engage in the following specialties:

Selling secondary homes to people seeking a "home-away-from-home" to get away from it all. The second home market is one of the fastest-growing segments of the residential real estate arena. More than 21 percent of the sales in 2004 were second home purchases for use by the purchaser or for investment purposes.

Working exclusively for a builder of new homes, usually by serving as the on-site salesperson for a new home community. In this role, the agent sells only the builder's homes. If buyers need to sell an existing home outside of that community, usually another agent handles that sale.

Representing residential real estate investors who are looking to increase wealth through the ownership of homes, duplexes, triplexes, and fourplexes. Small-scale multiplexes are handled by residential rather than commercial agents for the following two reasons:

• Often the purchaser lives in one segment of the multiplex, creating a residence as well as an investment property.

• Usually a purchaser can buy up to a fourplex with a conventional mortgage.

Residential agents rarely represent buyers or sellers of multiplexes with more than four dwelling units. Purchasers of larger complexes must qualify for and secure commercial real estate loans — which involve a more restrictive set of conditions, including higher interest rates, shorter amortization schedules, and considerably higher initial equity positions or down payments.

What is commercial real estate?

Commercial real estate centers on business or investment use of real estate.

In commercial real estate, you can buy, sell, lease as a lessor (the person who owns the property for lease), lease as a lessee (the person who's trying to lease the property for their use), syndicate, joint venture, develop, option, and invest in a wide range of commercial real estate categories, including retail, office, industrial, apartments, investments, and raw-land leasing.

Commercial real estate agents are usually familiar with many of the commercial real estate areas, but they generally specialize in one of the following areas or disciplines:

Representing tenants or lessees by finding, selecting, and negotiating new space for client businesses.

Representing building owners or lessors by working to lease out building space for the highest possible price and with the most favorable terms. Frequently a commercial agent represents one owner or even one building exclusively in order to ensure the building is leased to capacity.

Representing investors who want to buy and sell commercial property by finding opportunities that offer the lowest risk to the client, the best return on investment, and the best capitalization rate, which is the net operating income of the property divided by the sales price or value of the property.

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For Dummies is a registered trademark of Wiley Publishing, Inc. in the United States and other countries. Used here by license.

Featured Local Company

McPherson Mansion

810-599-5147
915 Michigan Ave.
Howell, MI

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Advertising	Family	Home Services	Real Estate Resources
Business Services	Fashion	Industrial Goods & Services	Retail & Consumer Services
Career	Financial Services	Insurance	Software
Cars	Food & Beverage	Internet	Technology
Computer Hardware	Franchise	Legal	Telecommunications
Construction	Health	Miscellaneous	Trade Shows
Education	Holidays	Nightlife	Travel
Entertainment	Home Appliances	Online Database	Weddings
Environmental	Home Electronics	Pets	World History