If you are looking into making a commercial real estate investment then you have come to the right place. The monetary return on a commercial property can be significant for any investor if the property “fits the bill.” It is important to learn as much as possible about a potential commercial real estate investment (the property itself) before taking any investment risks. You should also become well acquainted with the different types of commercial real estate properties that are available and how each type may increase the return on your investment. There are six main types of commercial real estate property investors may choose from.
Investing in an empty plot or “raw land” can be extremely beneficial for the investor as long as they understand the full potential of the land. Investing in a land with soil that could be used as farmland would allow the investor to lease the land to a farmer who could grow crops, raise livestock, or begin meat and dairy production. Wooded lots are ideal for investors to allow logging companies access to, and the return benefits would include both financial gains as well as clearing the property. This opens doors for future leasing options that will further maximize the return of such an investment.
Office space is useful in small towns or big cities. Investing in an office building could extend the length of the return on the property, as many tenants often sign longer leases. This secures the financial future of the property for longer than a short-term lease or agreement.
Retail space will bring the biggest return if the property is in the right location for the type of retail desired. For example, investing in a strip mall with no major highways or large amounts of traffic could leave your tenants unable to pay their dues, jeopardizing your profit margin and the sustainability of the property.
Storage units are a great starting point for investors. Requiring little upkeep and minimal staff to operate, storage units can be useful in almost any location. If investing in a storage unit, be sure to check out the local competition first and maintain reasonable yet accommodating rental rates.
Also referred to as apartment buildings, multifamily housing is also considered a commercial property. If done so correctly, investing in multifamily housing can be rather lucrative as the demand for housing is not expected to decline. The steady stream of rental payments from tenants also adds to the security of investing in commercial real estate properties.
Industrial properties are considered warehouses, research facilities,
manufacturing facilities, and everything in between. To access the full return of the industrial property, it is important to have a plan for the kind of industry you wish to create and to consider how that industry would fit into the community.
Every commercial real estate property has some type of potential. The key to investing in commercial real estate properties successfully is educating yourself about the property and the area surrounding it. Have a “game plan” for your investment that includes your expected costs, profit, and any possible setbacks you may face. Starting the journey through owning and receiving the maximum return from commercial real estate investments can be much easier if you do a little research first. You can learn more by visiting Market Space Capital.