Do you think Industrial and Commercial Properties are the same?
People use the terms “commercial” and “industrial” interchangeably. However, there are real differences between these two property sectors. Understanding these differences is an important step toward knowing where to invest and recognizing the tax implications of each type of property.
1. Industrial Real Estate – Where Goods Are Produced
Industrial property typically consists of real estate that is set aside for production, manufacturing and warehousing purposes. Usually, goods are produced there. However, construction sites themselves can also be considered industrial property. Industrial sites are usually located on the outskirts of urban areas, and they are not accessible by the public without permission or an escort.
2. Commercial Real Estate – Where Goods Are Sold
Commercial property, on the other hand, is frequently visited by the public. That’s because this real estate usually consists of retail shops, restaurants and offices that depend upon foot traffic as one means of acquiring new business. More effort tends to be focused on making commercial areas attractive, as this is believed to encourage people to patronize these businesses. Moreover, commercial properties tend to be centrally located.
3. Investment Pros and Cons
Whether you decide to invest in industrial or commercial buildings, you’ll encounter pros and cons. Industrial sites are typically restricted to a single tenant, and because the areas are so specialized, it can be hard to find a new occupier. Accordingly, if you want to switch from one use to another, you can expect to pay a hefty price. Still, industrial property can make for long, valuable leases and initial investments are relatively small.
If you choose to invest in commercial property, you may benefit from being able to have a variety of tenants on one site. However, the financial success of these tenants is often directly tied to the economy. When things turn sour, you may find yourself with significant vacancies. You can specify relatively long term leases and you can also choose from a variety of sizes and types of operations.
4. Property Tax Points to Consider
Investing in commercial and industrial properties is generally a sound decision. However, it pays to be aware of the property tax implications that go along with owning real estate in these categories. Local and state governments tend to set a much higher tax rate on commercial and industrial property than they do on residential property. This means that a commercial or industrial property owner can count on paying an unfair amount of taxes year after year.
Working with Assessment Technologies Makes the Difference
Leveling the property tax playing field for commercial and industrial property owners is a specialty of Assessment Technologies. Our property tax experts will carefully evaluate how much your property is worth, comparing it with the official assessment value. The hard truth is that many government entities do not fairly and accurately assess property value. This leaves it up to the customer to get the job done. Unfortunately, this is a complicated task to take on single-handedly.
That’s where Assessment Technologies comes in. Owners of commercial and industrial properties can rest assured that their property valuations will be accurate and that they will receive all of the credits they deserve when they work with Assessment Technologies. Whether you are buying a new property or wanting to appeal your current property’s assessment, contact Assessment Technologies today.