If you are looking to invest in real estate, you might not be interested in residential real estate. This is because this space is somewhat crowded and commercial properties usually have a better return on investment than residential properties. In this article, we are going to look at 4 types of commercial real estate property you can invest in.
Offices are the most common type of commercial real estate investment. An investor can choose between three property classes. Class A includes commercial properties that are newly built. They might also be extensively renovated and located close to important amenities that make them very attractive. Class B properties are often older buildings that might require a sizable capital investment. These properties require some repairs and upgrades, although most of them are taken care of very well by their owners.
Lastly, we have Class C properties. These are often older buildings that require a huge capital investment and redevelopment. They are often poorly located and are not usually a good option unless you can find a niche use for them or a business willing to lease the whole property.
Industrial real estate properties range from large manufacturing sites to warehouses. These properties are perfect for businesses in the manufacturing industry because they conform to height and width requirements and have docking spaces. These types of properties are also great for other types of investments as they can be converted into different types of spaces.
Retail buildings are another lucrative commercial real estate investment. These types of properties are located in urban areas and include community retail centers, banks, strip malls, and restaurants. Although they are expensive to invest in, their return on investment is very high as they often have very low vacancy rates.
Special Purpose Properties
These types of properties are less desirable because they are hard to convert after the fact. These include properties such as self-storage, schools, and car washes. If you want to invest in these properties, you have to prepare a large cash investment because most of them have established customer bases, are located optimally, and have a massive return on investment.
Flipping Commercial Real Estate
While you might invest in commercial real estate to generate some income, you might be looking to flip it after doing some repairs. In this case, you need to get in touch with inspectors to check the electrical and plumbing systems, structural integrity, as well as roofing.
Next, you need to find the contractor who will complete the necessary works by asking some pertinent questions. For example, are you looking for good commercial roofing in Cherry Hills Village, Colorado? Or, are you looking for a complete electrical system overhaul? Once you find the right contractor and the repairs and retrofitting are complete, you can then flip the property for a profit.
Investing in commercial real estate is highly rewarding as there are lots of properties you can choose from as well as different ways you can go about managing your investment. Just ensure you know which types of investments you will be required to make before completing the purchase of a property.