There is an endless supply of commercial real estate. From gas stations to industrial buildings, to municipal buildings to apartments, to office buildings and even cemeteries and synagogues. There are lot of options for investors looking into commercial real estate, but the question is often: Which type of commercial real estate property is the best to invest in?
The Best Investments
Flex spaces, light industrial complexes and spaces, are always in demand. They are easy to lease, easy to maintain and the tenants typically always take good care of these spaces since they’re designed partially for business and partially for living. Apartment and multifamily properties also carry some of the lowest risks in the industry with the only downside being the high cost of maintenance and management.
Self Storage units have withstood every economic downturn in history and always manage to stay on top. They are easy to maintain with little maintenance due to the lack of live-in tenants with the only downside being that the industry is incredibly competitive. Self Storage businesses pop up next door to each other, competing for customers by offering the lowest price possible while including highest level of amenities that make sense. On the other hand, mobile park homes have proven to hold almost zero risks as long as everyone owns their own mobile home. There are no buildings or repairs needed. Most of your money will be spent in landscaping and lighting; the renters generally take care of their own area.
Single-tenant, single-use buildings (i.e. car dealerships) carry the highest investment risks available. Due to being so specific and expensive, when they’re good (you have a tenant) they’re good, but when they’re bad, they’re awful. This kind of investment is also, oftentimes very hard to sell due to the enormous space and specific layout needs.
What’s In Demand
While flex spaces are always a good investment, multifamily homes — between 2 and 4 units — and co-working spaces are in the most demand. Multifamily homes with under 5 units are often financed just like primary homes and thus come with traditional bank loans and low interest rates as opposed to actual commercial loans which are generally harder to get and come with significantly higher interest rates. With the pandemic and everyone working from home, the need for office space has greatly come into question leading to the rise in demand for co-working spaces. Co-working spaces allow businesses to save on overhead costs while still having a physical location to come to if necessary. These two types of commercial real estate are your best options for immediate returns.
Contact Overhead Capital Ltd. today to get your commercial properties financed successfully.