If you’re ready to start investing in commercial property, or if you’re looking for a new property to add to your portfolio, it’s helpful to understand which commercial real estate types make the best possible investments. From apartments to self-storage facilities, here are some awesome commercial property investment opportunities that you shouldn’t pass up.
Despite inflation, the American economy continues to flourish with consumer spending on the rise. As such, shopping centers of all sizes are always fantastic investment opportunities. From strip malls to indoor shopping malls, shopping centers offer exceptional stability, especially when combined with long-term leases spanning five to 20 years. If you’re a new investor, start small and scale up as your income grows. Keep in mind, though, that you’ll need some capital to get started, and you’ll have multiple tenants occupying different parts of the building rather than one single tenant.
Mobile Home Parks
Mobile home parks are incredibly versatile investment opportunities. There are several paths you can take, but the most prosperous involves purchasing the land and asking tenants to bring their own mobile homes. This way, you can collect the lot rent without having to worry much about maintenance on maintenance-heavy mobile homes. There’s significant cash flow involved, and the demand for affordable housing is higher now than it has ever been in the past. For the best possible results, aim to buy a park that’s large enough for you to hire a property manager so you can take a more hands-off approach. Despite the negative reputation associated with mobile home parks, it is possible to own and manage a nice and comfortable plot of land with quiet tenants.
There are several types of self-storage facilities, but most are large buildings with individual rooms that people can rent to store their belongings. You can opt for climate-controlled or non-climate-controlled rooms with indoor or outdoor storage unit access, but keep in mind that security will be very important as self-storage facilities are common targets for thieves. Some of the benefits associated with investing in self-storage include the lack of actual tenants, fewer maintenance problems, and an economy-proof industry. The only major downside is that it can take some time to fill all of the units and generate maximum revenue.
Apartment buildings are another excellent investment opportunity if you’re looking to break into commercial investing, but it’s easy to get in over your head if you aren’t completely prepared. Apartments are some of the most popular living accommodations in the country, so it isn’t hard to keep them filled, but you might find yourself dealing with unruly tenants or performing expensive maintenance from time to time. If you stay between the $500,000 to $5,000,000 range, the competition is relatively low. Furthermore, if newer apartments go up in the local area, your ability to attract tenants may suffer.
While there’s no perfect commercial real estate investment opportunity, the four listed above are some of the most popular options. They each represent a basic need, so there’s no shortage of interest or tenants, and with the right management skills and financial knowledge, it’s possible to turn a handsome profit.