Commercial real estate is not the same as residential real estate. Many failed commercial real estate ventures were undertaken by investors who make the mistake of thinking commercial real estate is the same as residential real estate and who failed to do the homework before committing to the endeavor. Developing a 200-acre commercial property is much more involved and complicated than flipping a single-family house.

Commercial real estate is found everywhere. In metropolitan areas, most of the real estate might be zoned commercial. In rural areas, the commercial properties might be restricted to specific areas such as downtown or near the interstate. Finding commercial real estate is the easy part. Developing it into a high-profit venture is not as easy. Before suddenly deciding to dump your entire livelihood into commercial real estate, first you must understand exactly what it is.

In addition to many other properties, commercial real estate includes:

Restaurants and Retail Stores (leasing land or buildings)

Hotels and motels

Strip malls and shopping centers

Office buildings

Industrial parks

Apartment buildings and complexes

Condominium buildings and complexes

Amusement parks

Mobile Home Parks

Campgrounds

Some real estate experts claim that commercial properties offer much higher income and rate of return than residential properties. They also come with a much higher inherent risk. If you’re unable to flip a house, you might lose only $100,000. If your proposed 400-acre commercial development ends in catastrophe, you could be on the hook for millions. Always remember the golden rule: With great potential comes great risk. The more you’re willing to risk, the more you could possibly gain.