Types Of Commercial Real Estate Investing
When it comes to commercial real estate investing that are different types of property one can invest in. It is important to understand the advantages as well as the disadvantages to the different commercial investment types in order to match your own individual goals and interests.
Here are some of the major types of commercial real estate investments you can consider investing in.
Apartment Buildings These can be great investments. They are readily available, banks are willing to offer loans on them and they can be an excellent source of cash flow. Many investors get their start in commercial investing with apartment buildings. The key is to make sure the building is properly managed. If it is, an apartment building can be a source of positive cash flows long-term and build up equity over time. The disadvantage of course is that property management can be time consuming.
Mobile Home Parks These can potentially be profitable as there is not a lot of development that needs to be done. Income can be made not only from rents but also from buy and selling mobile homes in the parks for profit. The important thing to look for when considering a property is the occupancy rate and location. If the vacancy rate is high or in an undesirable area the park may not be a good investment.
Retail Centers (shopping centers/malls) are another excellent type of commercial real estate investing. One advantage is that they are generally leased out on a long-term basis with triple net terms in which tenants pay for property expenses such as real estate taxes, property insurance as well as maintenance and repairs.
Office Buildings Long-term and triple net leases are also used with these types of commercial real estate. The key is to find office buildings in desirable areas with low vacancy rates.
Industrial, Manufacturing and Warehouses These are usually solid investments as there is usually strong demand for industrial and manufacturing space.
Hotels and Resorts This type of commercial real estate investment is not really suitable for beginning investors, but those who are experienced can find these investments to be quite profitable. It is usually advised to let these types of investments be managed professionally by companies with specific experience in the hotel and resort business.
Health Care Facilities This includes nursing homes and assisted living centers. They can be be excellent investments because there is increasing demand for these services and financing for these types of properties is readily available.
Land Development This can be an exciting and potentially lucrative investment, when you take land without property on it and improve it. It can also be risky and does require experience to do well with land development.
Other types of commercial real estate investing include self-storage and mini-storage, senior housing, campgrounds and RV parks, car washes, golf courses, entertainment centers, gas stations and other specialty properties. Some types of commercial real estate investing are more complicated and require more property or industry specific expertise than others, so you will need to research your options to find which types of investments suit your goals, experience and abilities.