As an investor, you are always on the lookout for interesting properties to acquire. Whether you are looking to expand your real estate portfolio or invest in unique assets, it’s important to consider the different types of properties available to you. In this article, we will discuss four types of interesting properties to acquire, each with its unique advantages and disadvantages.
You might have heard of Industrial, Retail, and Multifamily a Montreal real estate lawyer. These sectors of real estate have their own unique characteristics that make them interesting to investors. If you are a single-family residential investor, then you probably already know about storage units, a subclass of industrial. While they operate similarly to multifamily, storage units do not have residential tenants. Office buildings can range from as small as a commercially zoned home to a downtown skyscraper.
Types of Interesting Properties
Commercial real estate
If you are considering investing in commercial real estate, you need to know the right timing and market conditions. The health of the economy is directly correlated with the profitability of commercial real estate. Some indicators to watch are the GDP and unemployment rate. Knowing these indicators can help you avoid buying property at a time when the market is already high or low. You should also know the importance of conducting due diligence. This can be done through a variety of methods, including conducting a property inspection, reviewing financials, and doing a feasibility study.
The main types of commercial real estate are office space, industrial space, and retail space. Depending on the type, you can choose from stand-alone retail spaces, strip malls, and buildings housing restaurants. Before purchasing a commercial property, consider the type and location, as well as any existing tenants. An anchor tenant can increase the value of the property and attract prospective buyers. Also, a successful anchor tenant can attract tenants to smaller spaces around the anchor tenant.
Among the main types of commercial real estate, the land is the least expensive. It requires less maintenance and comes with minimal management expenses. The land is often purchased to develop a future-looking plan, such as a city or a suburban community. However, investing in the land will require massive capital and extensive real estate knowledge. Industrial property, on the other hand, is primarily used to manufacture goods.
Industrial real estate
When it comes to industrial real estate, there are four distinct types of properties that you should be aware of. The first type is the build-to-suit property, where the investor works with the tenant to customize a building to their specifications. Such a building typically comes with a pre-signed lease and a tenant already in place. The second type is the single-tenant property, which is a prime investment because vacancies can turn an industrial property into 0% occupancy very quickly.
Infill Industrial is another type of property. These properties are often connected to office spaces and offer flexible space for small businesses. They are an excellent choice for CRE investors interested in getting into industrial real estate. This type of property is highly desired by tenants and is perfect for a variety of users.
Industrial real estate is a great place to acquire if you are looking for a high yield. The average cash-on-cash yield on these properties is 6% to 7%, which is higher than that of apartment complexes or stand-alone retail properties. This means that a 7% yield will double your money in as little as 10 years, which is much faster than a 5% yield.
Another type of industrial property is a build-to-suit opportunity. Here, the landowner will pay the construction costs upfront and lease the space to a tenant once the project is complete. While there are several options for industrial real estate development, the key is to determine the demand for the area where the property is located.
Retail real estate
The main purpose of retail real estate is to house businesses that sell directly to consumers, and these types of properties can be interesting for investors. Typically, these types of properties offer low overhead costs and long leases, and they are often located along interstate highways to provide convenience in shipping and distribution. Moreover, the growth of eCommerce is driving the need for new delivery infrastructure.
In addition to retail buildings, you can also invest in retail out parcels, which are standalone single-tenant pieces of real estate. These parcels are commonly located in front of large shopping centers, near major thoroughfares, and have a high traffic density.
Strip centers, also known as “convenience centers,” are clusters of stores attached to one another. They typically feature convenience tenants. Most strip centers are less than 30,000 square feet in size, and their trade area is typically less than a mile. Buying a strip center is not easy, and lenders look at many factors, including the property’s immediate area and the structure’s quality.
Mixed-use properties are another type of property. In these properties, the ground-floor retail space is mixed with office space or apartments and may include hotels. Historically, this type of real estate was found only in urban areas but has now spread to suburban areas near major metropolitan areas.
The most secure and least expensive is raw land. The term “raw land” refers to undeveloped property that does not include construction or improvements. It is an undeveloped site that provides more freedom in terms of land use. Vacant property is one of the cheapest forms of real estate, and purchasing it is a popular long-term investment plan. Lands for sale have low upkeep expenses.
It is often acquired in exchange for rights to natural resources or future development. Farms, pastures, ranches, orchards, recreational areas, and planned urban development are examples of undeveloped land. Investing in undeveloped property takes a substantial amount of cash and a comprehensive understanding of real estate, including zoning restrictions, flood plains, etc.