أنواع العقاراتchapter 2

‫أنواع العقارات‬
1-Residential Rental Property:

What Is Residential Rental Property?
Residential rental property refers to homes that are purchased by an
investor and inhabited by tenants on a lease or other type of rental
agreement. Residential property is property zoned specifically for living
or dwelling for individuals or households; it may include standalone
single-family dwellings to large, multi-unit apartment buildings.
Pros of Rental Properties

There are several benefits to owning a rental property. They include:
Tax Benefits
The Internal Revenue Service allows you to deduct many expenses
connected with rental property in the categories of:
 Ordinary and necessary expenses

 Improvements
 Depreciation :represents how much of an asset's value has been
used up
 Seasonal Rentals
 If you rent your property seasonally, you may use it yourself for 14 days per
year—or 10% of the number of days that you rent to others at a fair market
price—and still be able to deduct your expenses.
 Exchange
 In a exchange, you can sell a rental property and invest in another of “like
kind” without paying capital gains taxes.
 Renting Extra Space

 You can also treat a room or area of your home—such as a garage, basement,
or accessory dwelling unit—like a rental, writing off a percentage of
the mortgage interest and other expenses against its income, although you
should be aware of the potential pitfalls of renting out extra space, including
local zoning rules.
Cons of Rental Properties

There are also drawbacks to owning a rental property. They include:
Lack of Liquidity
Real estate is not a liquid asset. Even in the hottest market, it can easily
take several months to complete a sale. And if your timing is driven by
an emergency or other unexpected event, your need to sell fast might
not garner the best price.
Rising Taxes and Insurance Premiums

The interest and principal of your mortgage may be fixed, but there is no
guarantee that taxes will not rise faster than you can increase
rents. Insurance premiums may also spike, as they have in the wake of
natural disasters.
Difficult Tenants
Despite your due diligence in vetting prospective renters, you could
wind up with tenants who are not ideal. For example, they could be
needy or demanding, pay late, forget to turn off the water, and so on. Or
they could be destructive, in which case the depreciation allowance in
the tax code may be sorely inadequate. You can, however, always add
a rider to the standard lease form that spells out rules about occupancy,
pets, smoking, tenant insurance, and the like. A security deposit can
also be helpful here.
Neighborhood Decline
In an ideal scenario, your investment property will flourish amid other
well-maintained dwellings and local amenities will improve. As a result,
your cash flow will increase steadily and your costs remain stable.
However, neighborhoods can change and your investment could
depreciate over time. You should pay attention to the local politics
where you invest, just as you would where you live. With some due
diligence, you can minimize this exposure.
https://www.investopedia.com/articles/investing/051515/pros-cons-owning-
rental-property.asp
 Volume 75%
2- Commercial Real Estate (CRE)
What Is Commercial Real Estate (CRE)?

Commercial real estate (CRE) is property that is used exclusively for
business-related purposes or to provide a workspace rather than as a
living space, which would instead constitute residential real estate. Most
often, commercial real estate is leased to tenants to conduct income-
generating activities. This broad category of real estate can include
everything from from a single storefront to a huge shopping center.
Commercial real estate includes several categories, such as retailers of

all kinds, office space, hotels & resorts, strip malls, restaurants, and
healthcare facilities.
Advantages of Commercial Real Estate

One of the biggest advantages of commercial real estate is attractive
leasing rates. In areas where the amount of new construction is either
limited by land or law, commercial real estate can have impressive
returns and considerable monthly cash flows. Industrial buildings
generally rent at a lower rate, though they also have lower overhead
costs compared to an office tower.
Commercial real estate also benefits from comparably longer lease

contracts with tenants than residential real estate. This long lease
length gives the commercial real estate holder a considerable amount of
cash flow stability, as long as long-term tenants occupy the building.
In addition to offering a stable, rich source of income, commercial real

estate offers the potential for capital appreciation, as long as the
property is well-maintained and kept up to date. And, like all forms of
real estate, it is a distinct asset class that can provide an
effective diversification option to a balanced portfolio.
Disadvantages of Commercial Real Estate

Rules and regulations are the primary deterrents for most people
wanting to invest in commercial real estate directly. The taxes,
mechanics of purchasing, and maintenance responsibilities for
commercial properties are buried in layers of legalese. These
requirements shift according to state, county, industry, size, zoning, and
many other designations. Most investors in commercial real estate
either have specialized knowledge or a payroll of people who do.
Another hurdle is the increased risk brought with tenant turnover,

especially relevant in an economy where unexpected retail closures
leave properties vacant with little advance notice.
With residences, the facilities requirements of one tenant usually mirror

those of previous or future tenants. However, with a commercial
property, each tenant may have very different needs that require costly
refurbishing. The building owner then has to adapt the space to
accommodate each tenant's specialized trade. A commercial property
with a low vacancy but high tenant turnover may still lose money due to
the cost of renovations for incoming tenants.
3- What is industrial real estate?
Industrial property is used for industrial purposes. It sounds simple, but it
comes in all shapes and sizes and covers a huge range of business types.
Industrial properties can generally be broken down into three sizes: small,
large and enormous.
Small industrial sites include single or double-storey buildings zoned for

industrial use. These often have flexible interior space, usually a mix of
warehouse and office space. ‘Flex’ spaces are used by small businesses such
as mechanics, research laboratories and start-ups.
Large industrial properties include medium to large warehouses and

factories that are designed to manufacture or store goods. They include
distribution companies such as third party logistics (3PLs).
On the larger end of the scale are the ‘big box’ industrial spaces. These
enormous industrial spaces are used as logistics and distribution centres that
hold and then distribute finished goods to stores and/or directly to
customers. If you think of the type of warehouse Amazon would have, you
will get the idea.
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ESTATE-TRANSACTION/
STEPS IN A REAL ESTATE TRANSACTION

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‫أنواع العقارات‬

1-Residential Rental Property:

Pros of Rental Properties

 Ordinary and necessary expenses

 Renting Extra Space

local zoning rules.

Cons of Rental Properties

Rising Taxes and Insurance Premiums

2- Commercial Real Estate (CRE)

What Is Commercial Real Estate (CRE)?

Commercial real estate includes several categories, such as retailers of

Advantages of Commercial Real Estate

Commercial real estate also benefits from comparably longer lease

In addition to offering a stable, rich source of income, commercial real

Disadvantages of Commercial Real Estate

Another hurdle is the increased risk brought with tenant turnover,

With residences, the facilities requirements of one tenant usually mirror

3- What is industrial real estate?

Small industrial sites include single or double-storey buildings zoned for

Large industrial properties include medium to large warehouses and

STEPS IN A REAL ESTATE TRANSACTION

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