A lucrative option for skilled investors
From office space to special purpose buildings, there are many commercial real estate options investors can choose from, depending on their goals and their individual situations.
However, because commercial real estate can be a bit more complicated - with larger purchase prices and lengthy closings - some residential investors are hesitant to invest in commercial real estate.
The unfortunate result of this is that investors miss out on some very attractive payouts that commercial real estate can offer.
Fortunately, however, if you have the right network and training, you can capitalize on payouts that are often much larger, while enjoying a more predictable and professional environment than residential investing provides.
The main types of commercial real estate include:
Multi-family
Examples of multi-family real estate include:
- apartment complexes
- high-rise condominium units
- duplexes, four-plexes, etc.
Retail
Examples of retail commercial real estate include:
- strip malls
- banks
- restaurants
- 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.
Office
This type of commercial real estate is typically further broken down into three categories:
- Class A
Whether a skyscraper or single-tenant office, this is commercial real estate that has been extensively renovated or newly constructed.
Bottom line, it’s the condition of the building that determines its classification.
- Class B
Popular with commercial real estate investors, Class B commercial real estate properties are often well maintained, older buildings that need some updating and/or minor repairs.
This class of investment offers great returns with a minimum of capital infusion.
- Class C
Often the target of redevelopment, Class C properties have higher vacancies, are situated in a poor location, and require a lot of more capital to turn a profit.
Industrial
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.
Special purpose
Examples of commercial real estate properties that can be designated as “special use” include:
- car washes
- self-storage units
- schools
- hotels
- airports
- 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 Houston we have the experience and the knowledge to help you learn and profit from commercial real estate investing.