If you’re looking to diversify your investment portfolio, commercial real estate is the way to go. There are plenty of benefits that come with investing in commercial properties, from income stability to asset appreciation.
Here are the most profitable types of commercial real estate to invest in:
- Office buildings
- Indoor or outdoor shopping centers
- Multi-family properties
Multi-family homes are considered commercial real estate when it has five or more units. These property types, consisting of apartments, condos, and townhouses, produce a large amount of cash flow every month. And while they may be more expensive to purchase, they provide great returns in the long run. Financing the purchase of a multi-family property is also easier since they carry less risk.
Investing in a multi-family property comes with plenty of benefits. Aside from the cash flow advantage, multi-family properties are not that difficult to manage. Unlike several properties that are spread throughout an area, a multi-family building is concentrated in only one location.
- Self-storage facilities
- Mobile home parks
Office buildings are one of the best commercial real estate investments out there. Since tenants typically take out long-term leases, this gives you a steady source of rental income.
A triple net lease is common when renting office buildings. In this commercial lease, the tenant also pays for the insurance, maintenance costs, and real estate taxes of the office building they are renting. The base rent is typically lowered to compensate for the additional expenses.
Indoor and outdoor shopping centers can be great commercial real estate investments, given the right location, accessibility, and amenities. You’ll also have multiple tenants renting different spaces in the shopping center. This allows you to continue earning rent even if one tenant ends their lease. And just like office buildings, retail spaces can have long-term triple-net leases as well.
Some people just have so much stuff at home, they end up with a cluttered home that does not spark joy. Enter, the self-storage facility, for the much-needed extra storage of household items you can still use for another day! Investing in self-storage units offers excellent returns since the demand for temporary or long-term storage is high.
Running and managing a self-storage facility is pretty straightforward, as well. There’s no need to paint walls or fix toilets. As long as the self-storage facility is safe and secure at all times, you’re good to go.
Another type of commercial property worth investing in is mobile home parks. These residential parks are permanent areas containing owned or rented mobile homes. Those who invest in mobile home parks only own the land where these mobile homes are parked, not the mobile homes.
In addition to paying rent for a space in the mobile home park, tenants are also responsible for the repairs, upkeep, and maintenance of their homes. As a mobile home park owner, your main responsibility is simply to maintain the property.
When it comes to commercial real estate in Missouri, there’s no better team to help you with your investment than the Cardinal Realty Group. Give them at 636.225.0385 or send them an email at Hal(at)CardinalRealtyGroup(dotted)com.