34:["$","$L35",null,{"category":"$36","relatedArticles":[{"id":"cG9zdDoyNTY4NjM=","databaseId":256863,"postId":256863,"author":{"node":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. Some staff members also hold the Certified Educator in Personal Finance (CEPF®) designation from the Institute for Financial Literacy.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Michael","fullName":"SmartAsset Team","lastName":"Carvin","name":"SmartAsset Team","postCount":{"pageInfo":{"offsetPagination":{"total":1623,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mcarvin","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybToxOTkwNA==","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":19904,"categoryId":19904,"link":"https://smartasset.com/real-estate-investing/articles","name":"Real Estate Investing","postCount":{"pageInfo":{"offsetPagination":{"total":61,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"real-estate-investing","ancestors":{"nodes":[{"name":"Mortgage","slug":"mortgage","__typename":"Category"}],"__typename":"CategoryToAncestorsCategoryConnection"},"parent":{"node":{"name":"Mortgage","id":"dGVybTo4Ng==","slug":"mortgage","__typename":"Category"},"__typename":"CategoryToParentCategoryConnectionEdge"},"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$37","date":"2024-07-26T14:25:27","excerpt":"

Commercial real estate offers many investment opportunities, from office buildings to retail spaces, industrial properties and multifamily apartments, as well as specialized properties like hotels. Each investment has specific benefits and drawbacks, so knowing the differences can help you make informed decisions. If you’re interested in investing in commercial real estate, a financial advisor can […]

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As a certified educator in personal finance, he edits and writes content that focuses on retirement, investments, home buying and other financial topics.\r\n\r\nArturo is a bilingual native in English and Spanish, and also writes as a freelance journalist for NBC News, among other publications. His articles have been published in Fusion, Univision, City Limits, the NACLA Report on the Americas and WhoWhatWhy, as well as La Opinión A Coruña newspaper in Spain.","additionalMeta":{"expertise":"Financial Planning, Retirement Planning, Investment Planning, Tax Planning","__typename":"User_Additionalmeta"},"email":null,"firstName":"Arturo","fullName":"Arturo Conde, CEPF®","lastName":"Conde, CEPF®","name":"Arturo Conde, CEPF®","postCount":{"pageInfo":{"offsetPagination":{"total":38,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"aconde","__typename":"User"},"reviewedBy":{"id":"dXNlcjoxNDQ=","databaseId":144,"userId":144,"avatar":{"url":"https://secure.gravatar.com/avatar/e1f3d3a0e571088b1ba1f56a767f73d3?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Brandon is a Certified Financial Planner™ (CFP®), Retirement Income Certified Professional (RICP) and Enrolled Agent (EA) with more than 10 years of experience as a financial professional. 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","

1. Office Buildings

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Office buildings are one of the most popular types of commercial real estate investment and can range from skyscrapers in urban centers to suburban business parks. Investing in office buildings can offer you steady income by leasing to various businesses, from small firms to large corporations. These properties are categorized into three classes:

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Class A: Top-tier buildings that are often newly constructed or extensively renovated, featuring prime locations, high-end finishes, and modern amenities.
Class B: These buildings are a step down, typically older but well-maintained, offering functional space at a more affordable price.
Class C: Older buildings, often needing renovation, and located in less desirable areas, representing higher risk but potential for significant value-add opportunities through improvements.

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2. Retail

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Retail real estate investments encompass properties where businesses sell goods and services directly to consumers. Retail spaces often attract high foot traffic and visibility, which can drive consistent rental income. Investors typically evaluate factors like location, tenant mix and lease terms to gauge the potential profitability of retail investments. Types of retail properties include:

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Shopping centers: Large complexes with multiple stores, including anchor tenants like supermarkets.
Standalone retail stores: Single-use buildings for one retail business, often seen in prominent locations.
Restaurants: Restaurants can attract consistent foot traffic, enhancing the property’s overall value.
Strip malls: Smaller clusters of retail stores, typically without major anchor tenants.
Outlet centers: Shopping centers with brand-name retailers offering discounted prices.
Regional malls: Large indoor shopping malls featuring a variety of stores, entertainment options, and food courts.

","

3. Industrial

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Industrial properties make up a significant segment of commercial real estate investments. These properties cater to manufacturing, storage and distribution businesses. There are several types serving specific business needs:

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Warehouse/distribution centers: These facilities store goods and materials before they are shipped to retailers or directly to consumers.
Manufacturing buildings: These structures are equipped for the production and assembly of goods. They often feature specialized equipment and ample space for operations.
Research and development (R&D) facilities: These properties are designed for companies focusing on innovation, offering lab spaces, offices, and light manufacturing areas.

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4. Multifamily Residential

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Multifamily residential properties include apartment complexes, townhouses and condominiums that house multiple families or individuals. Investors are often attracted to this type of investment due to the potential for steady rental income and scalability. Additionally, multifamily properties can also increase in value through renovations and property management improvements. Finally, financing options can be more favorable, reflecting the stability and demand within this sector.

","

5. Hotels

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These properties include a wide range of establishments, from luxury resorts to budget-friendly motels. Investors can benefit from multiple revenue streams, including room rentals, event hosting and on-site amenities such as restaurants and spas.

","

The performance of hotel investments is often tied to tourism trends, economic conditions and business travel, making market research and location analysis critical. Additionally, hotel investments typically require active management and operational expertise to maximize profitability and maintain high occupancy rates.

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6. Special Purpose

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Special purpose properties are a unique type of commercial real estate investment, typically designed for a specific use that isn’t easily repurposed. These properties include structures like amusement parks, stadiums, schools and airports. Investors in special purpose properties can benefit from long-term leases and stable tenants due to the specialized nature of the facilities.

","

However, the niche use can make these properties harder to re-market if the original tenant vacates. As a result, thorough market research and understanding of the property’s specific industry are important for potential investors.

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7. Mixed-Use Developments

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Mixed-use developments combine residential, commercial, and sometimes industrial spaces within a single project. These investments create vibrant, self-contained communities where residents can live, work, and shop without extensive commuting. Typically, a mixed-use property might include apartments or condos, retail stores, restaurants, and office spaces.

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The blend of different property types within one location can lead to diversified income streams, reducing the risk for investors. Additionally, these developments often benefit from increased demand due to their convenience and the trend toward urban living. Investing in mixed-use developments can offer a dynamic and potentially lucrative opportunity in the commercial real estate market.

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8. Land

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Land can be developed into commercial uses, such as retail centers, office buildings or industrial parks. Investors often purchase land with the intent of either developing it themselves or selling it to developers at a profit. The value of land can appreciate over time, especially in areas experiencing growth and development.

","

Additionally, land investments typically involve lower maintenance costs when compared with developed properties. However, investors should consider factors such as zoning laws, environmental regulations, and the overall market demand for the type of development envisioned.

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Bottom Line

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Commercial real estate encompasses a wide range of investment opportunities that can diversify and help your investment portfolio grow. Before you buy commercial real estate, however, you should research the different types available and make sure you compare the benefits and drawbacks for your portfolio.

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Real Estate Investment Tips

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Photo credit: ©iStock.com/katleho Seisa, ©iStock.com/FreshSplash

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Navigating the financial and emotional complexities of a divorce can be daunting, especially when it comes to deciding the fate of a shared home. A divorce house buyout is an arrangement where one spouse pays the other for their share of the home’s equity. For divorcing spouses, it’s important to understand how this process works, […]

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His particular areas of focus include retirement, financial planning and investing. Patrick studied English at the University of New Hampshire and currently holds the Certified Educator in Personal Finance (CEPF) designation. \r\n\r\nPrior to joining SmartAsset, Patrick was a senior writer at MagnifyMoney, where he covered investing. His career began in journalism and included 11+ years at The Jersey Journal, where he covered sports and news as an editor. His work has appeared on Yahoo Finance, MSN, NJ.com, and The Star-Ledger. He lives in Portland, Oregon.","additionalMeta":{"expertise":"Retirement Planning, Social Security, Estate Planning, Taxes","__typename":"User_Additionalmeta"},"email":null,"firstName":"Patrick","fullName":"Patrick Villanova, CEPF®","lastName":"Villanova, CEPF®","name":"Patrick Villanova, CEPF®","postCount":{"pageInfo":{"offsetPagination":{"total":307,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"pvillanova","__typename":"User"},"reviewedBy":null,"writtenBy":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. 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","

Whether you’re going through a divorce or just got married, a financial advisor can help you manage your financial life and plan for the future.

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What Is a Divorce House Buyout?

","

","

A divorce house buyout essentially means that one spouse pays the other for their part of the equity in the home they shared during their marriage. This allows one party to retain ownership of the home, while the other receives compensation for their share.

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This option can be particularly appealing when there are emotional ties to the home, such as an attachment to the family residence or practical considerations like providing stability for children.

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While a buyout can seem like a financially prudent alternative to selling the home, particularly in market downturns, it is not always the most advantageous choice for both parties. It’s essential to approach this option as one of several available and to assess the individual circumstances and market conditions carefully.

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How House Buyouts Work

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For many, the family home is the most significant asset they own, and deciding who gets to keep it can be a point of contention. A house buyout is one way to resolve this. Here’s a breakdown of four general steps in the process:

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1. Determine the Home’s Value and Your Equity

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When determining a home’s value and each spouse’s equity in it, securing a professional appraiser is important. They provide an unbiased market value by taking into account comparable property sales, the home’s condition and current market trends. It’s important to note that appraisals are not foolproof and can be affected by market fluctuations. When engaging an appraiser, consider asking the following questions:

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What is your experience in appraising homes in my area?
How do you ensure compliance with the Uniform Standards of Professional Appraisal Practice (USPAP)?
Can you provide a detailed explanation of how you arrived at the appraisal value?

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An accurate valuation not only lays the groundwork for determining each spouse’s equity but is also central to crafting a fair and amicable buyout agreement. Equity is the difference between the home’s market value and any outstanding debts against it, such as a mortgage. It represents the homeowner’s financial stake in the property.

","

For example, if a house is valued at $300,000 and there’s a $100,000 mortgage remaining, the equity amounts to $200,000. Dividing this equity becomes a central point of discussion in a buyout situation.

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2. Settle on a Buyout Price

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Establishing a buyout price might seem simple at first glance. Typically, it involves dividing the home’s equity equally between spouses. However, when ownership stakes are unequal or other factors come into play, the calculation becomes more nuanced.

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Let’s consider a case where the home’s equity is $200,000. If split equally, each spouse’s share would be $100,000. But if one spouse is entitled to 70% of the home, the buyout price would need to be recalculated to reflect that, resulting in an equity split of $140,000 and $60,000.

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The final buyout price can be influenced by factors such as individual financial contributions to the home or agreements made during divorce proceedings. There is no guarantee that the initial buyout price will be readily accepted by both parties, and it’s not uncommon for spouses to seek mediation to reach an agreement.

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3. Finance the Buyout

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Choosing the right financing option for a house buyout will require that it fits into your individual circumstances. Some might opt to refinance the home or get a new mortgage in order to buy out the other spouse. Others might consider liquidating assets like investments or retirement funds, though this move should be made with an understanding of possible tax implications and the impact on your financial future.

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For those who need alternative solutions, selling personal assets or setting up an installment plan could be viable options. Meanwhile, a spouse may choose to trade other assets in for the other spouse’s equity in the home.

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4. Formalize the Agreement

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A formal agreement should be drafted, outlining the terms of the buyout, which protects both parties’ interests and ensures that the agreement is recognized by lending institutions and tax authorities. The agreement should include the buyout amount, payment schedule and any conditions related to the sale of the house in the future. These agreements should be drafted carefully with the help of legal professionals to avoid future disputes.

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Legal and Tax Implications of a House Buyout

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The legal implications of a home buyout can include the transfer of property rights and necessary changes to legal documentation. For example, a quitclaim deed could be used to facilitate the transfer of interest in the property. This type of deed relinquishes a person’s claim to the property without affirming the validity of the title or specifying the particular rights being transferred. So with this arrangement, the grantot relinquishes any claims or rights to the property without providing any guarantees to the property’s title.

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Conversely, a warranty deed assures that the grantor has a clear title and the legal right to transfer the property. So, in this case, the seller guarantees that they hold a clear title to the property and provide assurances against any claims or defects in the title.

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Another thing to consider: When one spouse assumes the mortgage in a house buyout, refinancing is often necessary to release the other spouse from their financial obligations under the loan (this can help protect them from future liabilities associated with the mortgage).

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But, no matter which option you take, consider the tax implications of a home buyout. In some cases, the transfer of property as part of a divorce settlement is not considered a taxable event. However, if the buyout is structured in a way that does not meet specific legal requirements, the IRS may view it as a sale, potentially triggering capital gains tax.

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Bottom Line

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Arranging for a divorce house buyout is a significant step that involves one spouse buying out the other’s interest in the marital home. This process can be complex, emotionally charged and financially intricate, requiring a clear understanding and careful planning.

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Tips for Navigating a Divorce

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Photo credit: ©iStock.com/Morsa Images, ©iStock.com/fizkes, ©iStock.com/Pattanaphong Khuankaew

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A property title search verifies the legal ownership of the property and identifies any claims, liens or encumbrances that could affect the transfer of ownership. While buyers can conduct a title search themselves, the process can be complex, requiring access to public records, historical ownership documents and legal filings. If you’re unsure about navigating a title search or need guidance on protecting your investment, working with a financial advisor can offer you valuable insights and help you safeguard your real estate purchase.

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How to Do a Property Title Search in 5 Steps

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A title search involves researching historical ownership records and checking for legal claims against the property. This process can help you confirm that the seller has the legal right to transfer ownership and that there are no outstanding debts or legal disputes tied to the property. Here are five steps to help you do a property title search:

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1. Identify the Property and Gather Details

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Gather key details about the property. The information you collect will help you locate official records and confirm the property’s legal status.

","

Obtain the current owner’s name and the property’s parcel number. These will be verified through county tax records.
Obtain the property’s legal description. This is also found on the deed, property tax records or mortgage documents.
Check with the local tax assessor’s office to confirm the most recent property tax payments.

","

Having accurate property details can help you search the correct records and avoid confusion, especially when there are multiple properties with similar addresses.

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2. Locate Public Records

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Depending on the property’s location, you may need to visit a county recorder’s office, clerk of courts, or local land registry to access physical documents. Some counties provide digital access to property records, allowing you to conduct a title search online.

","

To locate the relevant records:

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Check county recorder’s databases for property deeds, mortgages and ownership transfers.
Visit the clerk of court’s office to search for any lawsuits, foreclosures or probate claims involving the property.
Contact the county tax assessor’s office to review property tax payments and confirm there are no unpaid balances.

","

Some jurisdictions offer title search services online, allowing you to search for records without visiting the courthouse. If you’re unfamiliar with the process, working with a real estate attorney can help you avoid overlooking any critical documents.

","

3. Establish Chain of Title

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The chain of title refers to the complete history of ownership transfers for a property. Reviewing this history helps verify that the title has been legally transferred without any fraudulent activity or disputes. To establish a chain of title:

","

Start by tracing ownership records back as far as possible, ideally to the original owner, or at least 50 years in the past.
Confirm that each transfer of ownership followed proper legal procedures and that there are no missing documents.
Look for red flags such as unexpected ownership changes, missing signatures or inconsistencies in the recorded deeds.

","

If there is a break in the chain of title, meaning an ownership transfer is missing or invalid, it could indicate potential legal issues that need to be resolved before purchasing the property.

","

4. Search for Encumbrances

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An encumbrance is any claim or legal interest that affects a property’s ownership, such as liens, easements or unpaid debts. Identifying encumbrances is essential to ensuring that the property can be legally transferred without financial obligations or restrictions. To search for encumbrances:

","

Check for liens from unpaid taxes, homeowner association (HOA) dues or contractor debts. Liens must be resolved before ownership can be transferred.
Look for easements or rights-of-way that may allow utility companies, government entities or neighboring properties to access part of the land.
Verify there are no pending legal disputes related to the property, such as boundary disputes or contested ownership claims.

","

If encumbrances are discovered, the seller may need to clear them before the sale can proceed. In some cases, title insurance can provide protection against unexpected claims that arise after the purchase.

","

5. Analyze All Available Documentation

","

Once you’ve gathered all the necessary records, it’s important to review and verify the information to confirm there are no outstanding legal or financial risks. To analyze documentation:

","

Compare ownership records, make sure there is a clear and continuous chain of title.
Double-check that all liens, mortgages and encumbrances have been satisfied or addressed.
Verify that legal descriptions and recorded documents match the physical property being purchased.

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If any discrepancies or legal red flags arise, consult a real estate attorney or title company to determine whether additional legal steps are required before completing the transaction.

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Bottom Line

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","

Knowing how to perform a property title search is important if you’re involved in real estate transactions. By following these five steps, buyers can verify that the title is clear of ownership disputes, unpaid debts, or legal issues. Hiring a title company or purchasing title insurance can provide an extra layer of protection and peace of mind.

","

Home Buying Tips

","$6a","

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Fair Housing Laws were established by the Fair Housing Act of 1968 to prohibit discrimination based on race, color, religion, sex, national origin, familial status, or disability. As a landlord, it’s your responsibility to ensure that all decisions related to how much you charge for rent, setting terms or evicting tenants are made without bias. Violations can result in severe fines and legal action. Additionally, local and state laws may offer more protections, so it’s important to stay informed about regulations specific to your area.

","

A financial advisor can help you analyze real estate investments and manage them in a portfolio.

","

What Is the Fair Housing Act?

","

Enforced by the U.S. Department of Housing and Urban Development (HUD), the primary purpose of the Fair Housing Act is to provide equal access to housing opportunities by prohibiting discriminatory practices in the sale, rental, and financing of homes. Violations of the Act can lead to severe penalties, including fines and mandatory changes to discriminatory practices.

","

This law covers a wide range of activities related to housing, including advertising, tenant screening, mortgage lending and eviction processes. For example, landlords cannot refuse to rent to someone based on their race. Similarly, the Act prohibits discriminatory terms or conditions in housing transactions, such as charging higher rent or requiring larger security deposits for different groups of people. The law also mandates that housing providers make reasonable accommodations for tenants with disabilities.

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Fair Housing Laws Every Landlord Should Know

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Fair Housing laws are designed to ensure that all individuals have equal access to housing opportunities without facing bias or prejudice from landlords or property managers. One of the key provisions of the Fair Housing Act is the prohibition against discriminatory practices in renting, selling, or financing mortgages.

","

For example, landlords cannot refuse to rent to someone with a protected status, nor can they impose different terms or conditions on their lease. Additionally, the Act makes it illegal to advertise rental properties in a way that suggests a preference or limitation based on these protected characteristics. It also prohibits making misleading statements about availability, such as claiming a vacant unit is unavailable.

","

Familial status and disability protections are also core components of Fair Housing laws. Familial status refers to the presence of children under 18 in a household, and landlords cannot deny housing to families with children or impose restrictions like banning children from certain areas of a property. However, this does not prohibit landlords who want to run a background check on tenants from doing so.

For individuals with disabilities, landlords are required to make reasonable accommodations to ensure these tenants can enjoy their homes fully. This could include allowing a service animal in a building that typically prohibits pets or making modifications to a unit to improve accessibility such as lowered countertops or ramps. Landlords can ask tenants to help cover these costs, but can’t charge tenants for them.

","

Landlords do have leeway to refuse requests if they can prove it will be an undue financial burden or hurt their ability to rent to future tenants. Landlords may also be able to negotiate terms requiring the tenant to restore the property to its original condition when they move out. A real estate attorney can be a valuable resource for landlords navigating these types of discussions.

","

Fair Housing Act Exemptions

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While these exemptions exist, it’s essential for landlords and property owners to be cautious and informed. Misinterpreting or misapplying these exemptions can lead to violations of the Fair Housing Act, resulting in legal and financial consequences. State and local laws may also impact these exemptions.

","$78","

Bottom Line

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","

The Fair Housing Act is a law that prevents discrimination in the sale, rental and financing of homes. It provides equal access to housing opportunities regardless of race, color, religion, sex, national origin, disability, or familial status. Landlords must comply with the Fair Housing Act to provide equal housing opportunities and avoid legal penalties for discriminatory practices.

","

Tips for Real Estate Investments

","$79","

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