The real estate consists of two major categories which are commercial real estate and residential real estate. In this article, we will be focusing on commercial real estate.
What is Commercial Real Estate Investment?
Commercial Real Estate involves properties used specifically for business and income generation. It usually requires larger investment capital and has been known to provide high investment returns for investors.
Commercial real estate is usually invested in by experienced real estate investors due to its high risk nature. It also requires larger capital than residential real estate.
Types of Commercial Real Estate investment
There are different types of properties that constitute commercial real estate which investors can take advantage of. Some of them are;
Offices- Office buildings are a key part of commercial real estate. Some of these buildings can be occupied solely by one company while some can be used as co-working spaces.
Hotels- Hotels and resorts can be a good source of commercial real estate investment. You can decide to run it as a business or lease it out to a company that will be able to manage it.
Retail stores- this includes shopping centres, malls and stores. These serve as a good source of profitable investment in commercial real estate.
Industrial buildings- These include factories. This is commercial real estate on a much larger scale and have high returns on investment.
Warehouses- are buildings used for storing goods to be transported. This can also be leased out to manufacturing companies at an agreed price.
How Profitable is Commercial Real Estate?
Commercial real estate is highly profitable as there are different avenues for making profit.
Property Appreciation- Investors can make money from property appreciation when they invest in property that has high value of appreciation based on certain factors such as the location, documents available and so on.
Direct Investment- Profit can also be made from direct investments. Investors can purchase a property and decide to lease or rent it out thereby becoming the landlord
Real Estate Investment Trusts (REITs)- Commercial Real estate investors can also partake in Real Estate Investment Trusts (REITs) that invest in the commercial real estate market.
How to Increase Commercial Real Estate Value
Commercial Real estate can be a high risk but also high reward investment. It is important to conduct thorough market research before deciding what type of commercial real estate to invest in. Some properties might do well on a small or large scale level but could be saturated and lead to low yields in investment.
Maintaining the property and keeping it up to date helps to increase its appreciation value. It might also require you getting professional help such as a property manager to help oversee the property and note details you might not ordinarily notice.
Investing in commercial real estate is usually a long term investment, and another way to increase value is by diversifying. Investors can decide to have multiple investments in order to increase the value they would get in return.
Commercial real estate sector has experienced new trends and major technological developments in recent years such as the smart building technology and online platforms for conducting transactions. It is a profitable sector that many investors are taking advantage of.
MKH Investment offers real estate investment opportunities that are highly profitable and guarantee massive returns on investment. Contact us by clicking here for more information.