Wednesday, March 10, 2010
Commercial Real Estate
Many rental buildings would not be considered commercial real estate. If it is 2-4 unit and you live in one then the building would actually qualify for residential loan status and if you don't live there is would still be considered residential investment property. If you own a building with 5 or more units or the building has a storefront then it is considered commercial and you would need commercial financing.
Commercial values have dropped on average 43% since their peak in 2007 and will continue to fall for at least a while longer (according to Moody's Investor Service). Moody's also predicts that multi-family building will hit bottom in late 2010 or early 2011. There are also predictions that rental rates will continue to stall until 2011 because of unemployment. When employment numbers start to improve so will rental rates. Watch the employments numbers and then you will know when you can start increasing rents again.
Commercial values have dropped on average 43% since their peak in 2007 and will continue to fall for at least a while longer (according to Moody's Investor Service). Moody's also predicts that multi-family building will hit bottom in late 2010 or early 2011. There are also predictions that rental rates will continue to stall until 2011 because of unemployment. When employment numbers start to improve so will rental rates. Watch the employments numbers and then you will know when you can start increasing rents again.
