When it comes to real estate investing, it is generally accepted that the commercial version is “leveling-up.” Because everything gets bigger on the commercial stage, it is often recommended that incoming investors get a number of years under their belts before making the transition. Once you do, you will find that commercial real estate is can be prodigiously rewarding. To this end, consider the following profitability comparisons among different types of commercial property.
- Properties in Growth Regions
Location is of course one of the most important prerequisites for highly profitable commercial real estate properties. Any region where a lot of traffic crosses will almost certainly cause residences and businesses to crop up at a torrid pace. Take universities, for instance: you get no end of eateries, shopping venues, and movie theaters nearby; so much so that the delineation “college town” has become a part of the lexicon.
Additionally, lease renewal is a lot more likely in growth regions, which of course helps keep commercial real estate units filled (assuming you’ve got an apartment complex or multifamily housing unit). Suburbs are another hot topic that never seems out of the running as a growth area.
- High Occupancy
It’s clear that if a property can attract and maintain a large number of tenants, then it will almost always be very profitable. The math is simple: the greater the number of tenants, the better your ROI when it comes to maintenance, and of course the more money you make as income. This is where research comes into play, too, for you to decide whether the location is better-suited for RV parks or apartment buildings – both are known to have very high occupancy rates. Other options are self-storage units; which are, additionally, considered high-demand units.
- Maintenance-Free Properties? What Are Triple Net Properties?
As the name implies, these benefit the real estate investor on three levels:
Maintenance is the responsibility of the tenant – not the landlord/investor
Taxes associated with the property are also the responsibility of the tenant(s)
Any applicable building insurance is rectified between the tenant and an approved insurance provider
This type of commercial real estate may provide the highest return-on-investment of them all, due to the hands-off nature of maintenance. It’s still your investment, and you’re responsible for developing it into a viable living space to attract tenants; but once they’re in, the responsibilities above shift to them. Contact Bold Growth Solutions today to get the financing you need for your next investment property.