Commercial real estate investors had quite the scare during the recent pandemic. As people started to work from home, many businesses canceled their commercial office leases. Thankfully, that scare is over as work from home dies a slow death.
Commercial property investments are a cornerstone of many an investment portfolio. Businesses of all kinds need space to conduct their business, so you can make money by providing it. That said, is buying a property for commercial purposes worth venturing beyond the comfort of residential rentals?
We think so, but there are a few caveats to discuss first. Let's take a look at opportunities and considerations when it comes to commercial types of properties.
Commercial Property Investments Come in Many Forms
"Commercial property investments" is a very nebulous term. It refers to any commercial real estate property location, regardless of use or industry. Renting out an office space would be very different from renting out a factory warehouse.
As any real estate expert will tell you, it's important to have a clear strategy and diversify investments. As people learned during the pandemic, you can't put all your eggs in one basket. Spreading out your investment across different property types will have the best results.
Commercial properties open you up to a lot more risk than residential ones. There could be disasters like fires, flooding, or worker injuries during everyday activities. This could open you up to lawsuits and compliance violations if you're not careful.
Make sure to obey zoning laws and regulations to the letter. Get yourself a robust insurance plan to protect yourself on a rainy day. You never know when disaster could strike as a property owner.
Buy Mixed-Used Properties
Mixed-use properties do exactly what their name suggests. They are properties that you can use for business and personal use. These are typically rental properties in the city that can serve as housing or a business hub.
As a result, more prospective tenants can use your rental property. You can have the "best of both worlds," as it were.
Rent it out as an office for one year. Then, switch to an apartment block if you decide that's a better strategy later on.
Hire Property Management Services
Becoming a property owner is the first step to a successful and lucrative side hustle. Eventually, it could become your full-time job. You may struggle to manage things when you've got dozens of properties.
At that point, it's time to hire property management services. This is a full-service company that handles everything in your stead. Rent collection, maintenance, the works.
This allows you to effectively manage your properties while you devote your energies elsewhere. These professional companies have years of experience to prove it. There's no need to worry about what will happen when you leave them to their devices.
Work with PMI
Commercial property investments present a challenging, yet profitable addition to your portfolio. There are a lot of different types of commercial properties, some of them mixed-use. We recommend hiring a property management company before things get out of hand.
PMI is the go-to source in your area for local property management. Begin building your portfolio by using our free rental analysis tool.