4 Types of Commercial Real Estate New Investors Should Consider
As a new investor, finding the right commercial real estate investment opportunities can seem practically impossible, especially in the competitive modern market. This is typically because newcomers tend to restrict themselves regarding what types of real estate they’re going after, narrowing down the field and cutting out potentially profitable sources from all sides. That’s why, if you’re new to the investment world, there are several different types of commercial properties you need to closely consider in order to get the best possible return for your cash in the end. The top 4 property types to consider include:
Apartments are the number 1 type of commercial real estate that investors, newcomers and old hands alike, tend to go for. This is because they have a predictable management model, and finding tenants is typically a simple matter. Banks tend to prefer with these types of predictable, reliable investments as well, making getting the funding for apartment buildings easier than some of the other commercial options out there.
Hotels are another excellent source of revenue if you know where and when to invest. This might not be the best first step for a new investor, but if you’ve had a bit of time to get your footing in this market, these types of commercial real estate can turn a huge profit if you know what you’re doing when it comes to advertising and management.
Shopping centers and malls are long-term investments that allow you to take your time with building up an income-generating location. A beautiful part of investing in these properties is that, as an investor, your risk is minimal, and your income won’t begin to drop as expenses rise. As stores that rent the spaces you’re managing pay higher and higher rent, your income continues to increase.
Office buildings and warehouses are more sources of long-term income, with leases that tend to last between 5 and 20 years. This means you can spend less time seeking tenants and more time raking in the cash. Furthermore, as is the case with retail centers, your tenant won’t only pay rent, but will also be responsible for paying for maintenance and repairs, real estate taxes and insurance on the property throughout the year, which saves you a huge chunk of cash.
Each of these 4 types of commercial real estate has its own pros and cons that you should consider closely before diving in head-first. Regardless of what you choose, it’s always important to keep an open mind when it comes to your investing, and diversify as much as possible.