Unknown to many, commercial real estate goes far beyond the usual spectrum of apartment rentals. This means that while residential properties will often be your first option, CRE investment involves any real estate that is bigger than a single house on a given lot, whether it is used as a living space or not. The following guide details some real estate options to consider looking into.
Apartment Buildings
Apartment buildings are among the most common types of CRE investment. Also referred to as residential buildings, these properties comprise multi-story apartments and smaller apartments with five or more units. Getting financing for these properties will often be easy due to the steady cash flow generated.
Hotels and Resorts
Hotels and resorts may challenge new investors, making this a better alternative for experienced investors. To get the best out of this investment option, make it a point to lease out the property to a second company to help out with its operation. A hotel or resort will require a hands-on approach due to new regulations and rules that could get out of hand when not properly managed.
Retail Centers
Retail centers include malls and shopping centers, with this CRE investment allowing you to lease on a triple net lease basis. The rate of return for this option increases as the taxes and expenses go up, increasing your cash flow over time. As with other triple net lease agreements, the rent increases will be built into the tenant agreement.
Offices and Warehouses
Offices and warehouses are other options to consider investing in due to their triple net leases. This means that tenants will pay property insurance, maintenance costs, and real estate taxes in addition to rent.
Land Development
Land development comes last and will require you to first get acquainted with the land development process, as this type of investment often deals with land that is not yet fit for building. For a successful venture, consider starting small before getting into expensive land development options.
If you are interested in any of the above CRE investment opportunities, make it a point to get the right financing partner. Call 18 Sierra Financial today for customized investment options that fit your project.