A lucrative option for skilled investors
Investing in commercial real estate can be a bit more complicated than investing in residential properties.
The many asset classes of commercial real estate such as offices, multi-family and retail, combined with factors such as larger purchase prices or complicated and lengthy closings can tend to make some residential investors shy away from commercial investing.
However, in reality, with the right network and training, commercial investors can capitalize on larger payouts than those found in residential investing. Investors will also 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.
This type of commercial real estate is typically further broken down into three categories:
- Class A
Office space that is either newly built or extensively renovated. The condition of the building determines its classification.
- Class B
Older buildings that are well-maintained but need minor repairs and/or updating. Often chosen by commercial real estate investors because of the smaller amount of capital needed to get a good return.
- Class C
High vacancy rates, poor placement, and poor condition make Class C properties the target of redevelopment. These kinds of properties require a lot of capital to see any results.
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.