3 Ways to Invest in Commercial Real Estate

3 Ways to Invest in Commercial Real Estate

3 Ways to Invest in Commercial Real Estate
When the topic of real estate investing comes up, most people think of fix and flip opportunities. While that was once considered a valued method for building wealth, it’s certainly not the only way to get started in investing in real estate. By looking at several options, you may identify a method that best appeals to your skills and resources.
Directly Investing in Commercial Property
The fix and flip is starting to die out as people realize this isn’t the get rich quick scheme that television suggests. However, buying into a commercial property and holding onto it as a source of rental income is a legitimate way to make money in real estate. It requires patience and commitment because it will require you to maintain the property in good condition. You will also have to manage tenants and ensure each unit is consistently providing income. If you have the time and passion to devote to a commercial rental property, this may be the investment for you.
Becoming a Limited Partner
As a limited partner, you invest capital into a commercial rental property, while allowing another partner to manage the day to day operations. While you may get a say in how major decisions are handled, you leave many of the operational decisions up to the general partner. You simply invest capital along with other investors and, in exchange, you own a percentage of the property. If you want the perks of real estate investing without having to get your hands dirty, this is one way to accomplish that goal.
Invest in an REIT
Also known as a real estate investment trust, an REIT is essentially nothing more than a mutual fund that invests in real property assets. Each REIT focuses on a certain type of asset, so you can choose a REIT that invests in commercial shopping centers or one that invests in multi-family homes. The benefits here are that you don’t have to devote much personal time to the investments, while the REIT diversifies your holdings to maximize your potential for growth.
These are a few of the most common ways to invest in real estate. As mentioned, each type of investment requires a different level of personal involvement. This may be one of the deciding factors in determining which type of investment is right for you. Alternatively, you may choose to try multiple types of real estate investments to maximize your earnings. Your personal tastes and needs will determine which strategy is best for you.
A Beginner’s Guide To Investing In Industrial Real Estate

A Beginner’s Guide To Investing In Industrial Real Estate

 A Beginner’s Guide To Investing In Industrial Real Estate

Industrial real estate has long played second fiddle to more consistent investments like apartments and traditional retail outlets, but industrial investment is suddenly breaking out in a big way. The past few years have seen a steady 10% growth in the market, and the market was valued at almost half a billion in 2017. It’s a trend that’s likely to stay steady, bolstered by the growth of e-commerce and the need for more warehouses to support their operations. If you’ve ever considered investing in industrial real estate, now’s the time, and here are some tips that can help you make the most of your money.

Determining a Property’s Value

The industrial sector has been in decline for some time, and that means that there’s less in the way of formal standards for evaluating their value. You may have to do some extra work to figure out a property’s worth. Start by measuring the square footage and comparing it to other warehouses in your region. From this baseline, you can adjust the value by using a number of metrics like age, security, and the presence of useful equipment and technology.

Determining the Right Location

While residential and commercial properties have fairly similar standards for desirability, warehouses follow different rules. The one major selling point for a warehouse’s location is how well positioned it is to deliver product efficiently. The ideal location is situated near a major transit hub like an airport or seaport as well as a centralized highway. And while that’s the principle thing to keep in mind, picking a warehouse that’s near a major population center can also be a huge selling point that can increase your property’s values significantly.

The Advantages of New Properties

The obvious choice for new investors might be to put their money into aging warehouses. Older warehouses in urban areas are often outperforming newer developments due to their location, but there are a couple of reasons why they’re unwise choices for a long term investment. The scarcity of these locations makes them highly competitive targets, and many of them aren’t equipped to meet the needs of new e-commerce retailers. Their lack of height means that they aren’t well-suited to the more efficient verticality of modern warehouses, and upgrading them to accommodate the robotics that power the modern warehousing industry is so costly that they can’t really be seen as an economically frugal alternative to newer developments built from the ground up to meet the needs of tenants.