Every day I come across clients who understand that having their residential property in a commercial zoning, implies that their property is going to have a commercial value.
The market price of residential properties is analyzed through transactions performed by an appraiser who studies the comparable of the property and determines its price according to the condition of the property and the square footage according to its geographic location.
As for Commercial Real Estate, such as buildings, land intended to generate profits from capital gain or rental income, such as a store, apartment complex, office buildings, shopping center, etc. Your market study is analyzed through all your operating expenses and your surplus profit, which is quantified between the capital percentage established in your municipal town.
In conclusion, residential real estate analyzes the market price through its value in square feet as it is established at the time of your study. Understanding that the Real Estate market is an imperfect one whose market price varies according to its location.
As for Commercial Real Estate, it takes into consideration the operating costs of the business, including the square footage of the property, along with the operating expenses. For this reason, all commercial property cannot be valued through residential property comparable, since its appraised price is everything that commercial property generates between its operating expenses and the surplus of its return on investment. An essential tool for any commercial property is to look for a specialized Commercial Real Estate Advisor, who will help you market your property for the right price. Keeping in mind that the Commercial Real Estate Broker is performing his function as an advisor and not as an appraiser who determines the value of the property.
Dear reader, if your residential property is on an avenue which is zoned commercial, the dilemma you have is that in order to sell your property to a buyer through a typical loan for the purchase of all residential property, it does not qualify for a typical loan due to its commercial classification. For more information, contact us, we are your Real Estate advisors.
