Putting your money into the real estate industry is risky but a lucrative opportunity. The risk is brought about by a lack of knowledge about how the industry runs, especially when dealing with commercial real estate. Besides being quite profitable, dealing with real estate also requires substantial financial investments, which is why it was traditionally left for big institutional investors. However, today the industry is accessible to even private investors like you.
Types of Commercial Real Estate
Industrial – This includes all the properties designed purposely for industry-related operations. Such include warehouses, assembly plants, manufacturing, and research and development centers. The location of such premises, in most cases, is not ideal to set up retail or residential real estate.
Office – These are building used as offices, for instance, for a law firm or a startup organization. Such properties include skyscrapers, office parks, and other tall buildings in urban areas.
Multifamily – These properties have more than four units, and they offer residential housing to people who are expected to pay a certain amount for rent. The size of multifamily commercial property varies, and some examples include condominiums, apartment communities, townhomes, and co-operatives.
Retail – These are properties that offer retail businesses a platform to conduct their operations with the public. The money made from such property depends on its location because it determines which tenants are likely to have an interest in the available units. Retail real estate includes factory outlets, shopping malls, strip malls, and even stand-alone complexes for single tenants.
How Does Commercial Real Estate Generate Income?
There are two ways you can realize returns when dealing with commercial buildings:
Value Appreciation – There is no way to increase land to cater to the rising demand for real estate. This is why, if you own commercial property, its value is likely to appreciate with time as more renters and buyers seek to get a space on it.
Rent – This is the money you get from tenants who have leased or rented space on your commercial property.
Investing in commercial real estate is a juicy business that can earn you a lot, especially if you understand its twists and turns. Lionheart Commercial Capital is at your service to give you the best financial advice and help before venturing into this industry.