A commercial property is designed for a specific type of business. These include office space, hotels, shopping centers and service stations. The best way to judge if a business is commercial is that money is earned but no product is manufactured there. The other designations in real estate to be kept in mind that cannot be called commercial property are residential and manufacturing property.

How land is utilized (zoning laws) is controlled by city and municipal properties. Commercial property is zoned like all other properties, meaning there are certain areas where commercial property must be placed and nowhere else. The commercial property is usually designated along major streets to keep the traffic flow from getting out of hand.

While a private home is not considered commercial property, apartment building with multiple dwellings exist to earn money for its owners and investors and are considered commercial property. Hospitals, research centers and doctors’ offices are understood to be commercial property. Manufacturing and commercial space are sometimes in shared areas and the designation of commercial or manufacturing property can be blurred. An example is a manufacturing plant that has a retail outlet within the structure.

When there are no zoning more freedom of choice exists. This would allow a homeowner to place a business within or next to the home. However, this freedom can lead to chaos when commercial properties pop up all over the place. The businesses will be more successful when the businesses are all in a few designated areas. Commercial property owners are often offered tax incentives to move into a specific locality, if the area believes this will help their tax base in the long run. These tax benefits are often extended if the community is benefiting from the rise in commercial businesses.

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