The 5 Best Commercial Real Estate Property Types
Investing in commercial real estate can be a great way to earn money toward retirement and diversify your portfolio. However, before you jump in, you want to make sure you are investing wisely. That involves learning about the different property types and which ones will be best for your needs.
- Warehouses and Office Buildings
This type of commercial property is beneficial because you have tenants paying you rent. Many times, it is also up to the tenant to pay real estate taxes, insurance and maintenance costs. This is especially advantageous if you have a tenant who wants to sign up for a long-term lease.
- Apartment Complexes
For a sufficient level of cash flow, you cannot go wrong with apartment buildings. A great thing about these is that they are located all over the place, and you are bound to find many in your area. You can do your research to see if an apartment building with less than 10 apartments would be good for you or if you would want to get something that has dozens of units. Another benefit is that banks are often more than willing to provide loans for residential properties.
- Land Development
One type of commercial real estate many investors do not think about is land development. This means you are investing in a plot of land that does not currently have a building on it or investing in a building that requires major renovations to be habitable again. While the potential for profits is great, you need to know what you are doing or else you could end up losing a ton.
- Resorts and Hotels
If you are a first-time investor, then you probably do not want your first venture to be a hotel. For more experienced individuals, resorts and hotels can be great. The reason is that if you invest in this property, you will still need to hire another business to actually run the day-to-day functions of the business.
- Retail Centers
This includes malls and shopping centers. This is similar to office buildings because you will be renting out units to businesses. You get long-term leases, and depending on the contract you want, you can include information about how rents will increase over time, which enhances your profits over the years.
There are pros and cons to investing in each type of commercial real estate. As long as you know what you are getting into, you can have a great chance at success.