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One thing that every investor knows is that it’s crucial to have multiple different kinds of investments in their portfolio. This is especially true when it comes to real estate investing. While there are investors who focus solely on buying and reselling residential homes, there are so many more options for the savvy investor. These diversified portfolios are what help them stay afloat when one part of the real estate market is down, and another is booming. And while the vast majority of realtors focus on residential homes, there are incredible gains to be found in commercial real estate.
Types of Commercial Properties
If you’re looking to expand your assets, here are 5 different types of commercial properties to keep in your investment portfolio.
Real estate properties that are zoned for retail stores are incredibly valuable. Investors like Samuel Kooris, Ty Warner, and Sam Zell know a good opportunity when they see it. Investing in properties in cities like Manhattan, Dallas, and around the world positions them to earn an income in a variety of markets. When they add retail properties to their portfolio, they open up opportunities for residual income for years to come. As businesses lease stores and restaurants in their properties, they are able to make money even when the residential housing market is down.
Apartments, condominiums, and townhomes will always be a good investment, especially in areas where there is low inventory. If people can’t buy, they will need to rent. Investing in large multi-family properties helps to stabilize a volatile investment portfolio. For people like Richard Peery, Herbert Simon, and Sam Kooris, real estate is an opportunity to not only build wealth but to also provide for a basic need.
People need to live somewhere and when investors like them pour money into projects, they know that not only will their wallets benefit, but it’s also helping people get a roof over their heads. This is especially true in places like Brooklyn or Manhattan where there aren’t a ton of properties. When they convert older buildings into housing or build something from the ground up, it brings people to the area and can uplift a depressed neighborhood. By sprinkling in other types of real estate investments, they can improve those places even more. Strategic investments into multi-family units are good business, especially in high-demand locations. This is something that Samuel Kooris in Brooklyn and Jeff Green, who has properties in multiple states, know all too well.
What do real estate agents, non-profits, and design companies all have in common? They need an office to do business from. Whether they run a one-man operation, or have multiple employees, having an office space is crucial. Investing in commercial real estate can look like buying office suites and buildings to lease out to other businesses.
Whether you’re in the suburbs of a big city, there are plenty of investment opportunities like this. Investors like the ones who created Phoenix Salon Suites or even coworking companies like Regus have further diversified their investments by renting out spaces for businesses in unique situations. Can you imagine investing in a property with small office spaces that people can rent out for short-term or long-term use? Think outside the box to find rentals that work for you.
Warehouses, factories, and other manufacturing facilities require special zoning. This means that they are also a special kind of commercial investment. Owning a property for industrial use can help you expand your real estate portfolio. While these investments aren’t as pretty as a new shopping mall or an office high-rise, they can be lucrative investments.
Hotels and Other Short-Term Stay Properties
A final option to add to your commercial portfolio is to invest in hotels and other short-term stay types of properties. Sites like VRBO and AirBnB provide easy ways to market and list homes, condos, and townhomes for rent. They can be used for corporate housing, vacation homes, or for long-term stays when people move to a new city. Investors have caught on to the trend and are buying up homes in high-demand areas like cities, near beaches, and other tourist locations. Then they turn around and list them for rent on these sites. What could’ve been a $1500 per month long-term rental can now fetch them premium prices as high as $300/night or more in some areas. With the right amenities, these homes can now yield $9,000+ per month in the busiest times of the year.