A lucrative option for skilled investors
Some residential investors avoid investing in commercial real estate based on fears surrounding factors such as larger purchase prices or lengthy, complicated closings.
And while commercial real estate investing can be a bit more complicated than residential, it’s definitely worth the effort.
In fact, with the right network and training, commercial investors will both capitalize on larger payouts and gain an opportunity to enjoy a more predictable and professional purchase environment.
The main types of commercial real estate include:
Examples of multi-family real estate include:
- apartment complexes
- high-rise condominium units
- duplexes, four-plexes, etc.
Examples of retail commercial real estate include:
- strip malls
- retail centers
These properties are often situated in urban locations and range in size from 5,000 to as much as 350,000 square feet.
The office class of commercial real estate is typically further broken down into three categories:
- Class A
These are offices which are either newly built or fully renovated. Whether it’s a skyscraper or a single tenant office, it’s the building’s condition that will classify it as a Class A property.
- Class B
A favorite among commercial investors, Class B commercial real estate properties need minor repairs and/or updates to be done. Since less capital is required with this property type it doesn’t take long for investors to see a good return from their efforts.
- Class C
Class C commercial real estate properties are often chosen for redevelopment purposes.
High vacancy rates, infrastructure in sad need of improvement and poor location are the hallmarks of a Class C commercial property.
Obviously then, investors will need to infuse a great deal more capital into this class of property.
Industrial commercial real estate is usually geared towards manufacturers, offering them spaces with height specifications and the ability to unload freight via docks for trucks and/or rail.
Examples of commercial real estate properties that can be designated as “special use” include:
- car washes
- self-storage units
- sports stadiums
- amusement parks
- mixed-use development (a mix of residential and commercial use spaces within the same complex)
If you’d like to know more about investing in commercial property in Austin we have the experience and the knowledge to help you learn and profit from commercial real estate investing.