We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free – so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
Financing a home purchase
Refinancing your existing loan
Finding the right lender
Additional Resources
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Compare Accounts
Use calculators
Get advice
Bank reviews
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Compare by category
Compare by credit needed
Compare by issuer
Get advice
Looking for the perfect credit card?
Narrow your search with CardMatch™
Personal Loans
Student Loans
Auto Loans
Loan calculators
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Best of
Brokerages and robo-advisors
Learn the basics
Additional resources
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Get the best rates
Lender reviews
Use calculators
Knowledge base
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Selling a home
Buying a home
Finding the right agent
Additional resources
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Car insurance
Homeowners insurance
Other insurance
Company reviews
Elevate your Bankrate experience
Get insider access to our best financial tools and content
Retirement plans & accounts
Learn the basics
Retirement calculators
Additional resources
Elevate your Bankrate experience
Get insider access to our best financial tools and content
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free – so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
Commercial real estate is land on which a business can be operated for revenue. As opposed to residential real estate, which can only be used as a primary residence or for rental housing, commercial real estate is designated by law as property intended for a business to generate income. Income from commercial real estate can come from charging rent to businesses or individuals that lease the space, or from the owner running a business on the property themselves.
Local laws stipulate which areas are designated for commercial use and which are for residential use through a process called zoning. Residential areas comprise housing for single or multiple families and have minimal traffic and noise. Commercial areas allow for a wider range of building types and business activities, which may otherwise interrupt daily living if not separated from residential housing areas.
Buildings in a commercial area must house a business or businesses. In urban environments, this can be in the form of large office buildings rented out by many different businesses, or facilities that charge rent to multiple patrons – such as self-storage or medical office buildings. Commercial real estate in suburban areas often consists of a single business per building, such as a car wash or restaurant. In both cases, the owner of the real estate will receive a reliable rent income, or may elect to operate an enterprise of their own.
Office buildings contain workspaces — generally corporate or professional enterprises (as opposed to retail or manufacturing). Office space is commonly divided into three classes.
Industrial buildings can range from heavy manufacturing to light assembly facilities; they also can include storage and bulk warehouse structures. This is one of the most regulated forms of real estate. Industrial zoning rules can be very complex, depending on the type of industry involved: Oil refineries, for example, can’t be built in just any area that is zoned for industrial use. Depending on the city and state regulations, as well as the area of interest, industrial use for commercial properties can be more or less feasible.
Commercial real estate used for retail covers everywhere you shop and pay for goods or services including:
While commercial real estate is usually contrasted with residential real estate, multifamily dwellings (apartment buildings, rowhouses, assisted living facilities, etc.) are kind of a hybrid: Yes, people live in them, but they represent a business and generate income for the person or entity that owns them. Basically, buildings or groups of buildings with five or more residential units are actually designated as commercial, not residential, properties. Buildings with one to four rental units typically still fall under the classification of residential real estate — although those in financial circles consider them as investment properties (just to add to the confusion).
For this reason, local zoning laws often go further than just slotting areas for residential or commercial use, but often sub-divide them further as either for single-family or multifamily dwellings. That’s why commercial development of new apartment complexes often tends to cluster in certain neighborhoods or areas of a municipality.
Direct or active investment in commercial real estate means owning and managing a property yourself. You can invest in real estate directly by working with a real estate agent or attorney to research options, pick out a property, and make an offer. You’ll typically need to have significant assets to finance your purchase or work with a lender specializing in commercial real estate loans. You may also structure a syndication around a particular commercial investment opportunity to raise funds from an entire group of investors.
If managing a building or structure is too much work or risk for your preferences, you can also invest in real estate indirectly: not by purchasing physical property yourself, but by buying a stake in a company or partnership that does. People who participate this way are known as passive real estate investors. They share in the income and profits the real estate generates, but don’t make any decisions about it.
A real estate investment trust (REIT) is essentially a publicly traded company that invests in real estate: You buy shares in it as you would any stock. REITs are available for all types of real estate, so you could narrow down your investment choice to just Class A buildings, for example.
In addition to REITs, you can invest indirectly through different real estate partnerships and crowdfunding platforms. You might invest capital in a syndication, or opt to purchase units of an investing fund to diversify your capital into multiple asset classes for even lower overall risk. Passive investors are commonly considered limited partners — “limited” in that they don’t participate in management, they just put up money — but can also become partners in a joint venture, or conduct private money lending (although the latter two are less common with commercial investment properties).
Bankrate.com is an independent, advertising-supported publisher and comparison service. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. Bankrate.com does not include all companies or all available products.
Bankrate, LLC NMLS ID# 1427381 | NMLS Consumer Access
BR Tech Services, Inc. NMLS ID #1743443 | NMLS Consumer Access
© 2022 Bankrate, LLC. A Red Ventures company. All Rights Reserved.
About Author
