If you’ve never seriously considered investing in commercial industrial properties, now is the time to take a second look. Commercial industrial properties can really amp up your portfolio and give your investments excellent profitability and staying power. That’s why a lot of investors in Europe have been getting into it by using services like the Beste Portfolio App and it’s only a matter of time before it catches on over here and you miss your chance. So Here are some advantages to commercial industrial property.
1. Commercial industrial properties have lower turnover
Lower turnover means more stable income for you, higher tenant loyalty, and less stress all around. Industrial property can be easier to manage than other types of commercial spaces, as it usually involves just one tenant for a large-scale space. You are also more likely to get more stable, high-quality tenants. Leases tend to be 5-10 years in length, which gives strong income stability to the investor.
2. Higher Return On Investment
Due to the high standards dock doors Richmond and other industrial products are manufactured to, most expensive purchases you need to make will only be one-time purchases. This means you’re not constantly bleeding money into repairs and replacements, allowing a better ROI. Commercial industrial properties can offer a higher return on investment (ROI) and other types of investment properties, as well as more predictability. For example, if you can acquire an industrial property at an 8.2 CAP rate with a 4-year internal rate of return at 12%, and you can borrow at 4.25%, investing that capital is well worth it!
3. Industrial properties give your portfolio diversity
The added stability of long commercial leases and top-notch tenants can give your investment portfolio much-needed stability of cash flow. While high-risk, high-return investments can be exciting, it’s important to ground your portfolio with steady, long-term income streams. High-quality commercial investment properties can do just that. You may also want to combine that with other revenue streams such as Bitcoin, it has taken off rapidly with signs of it not slowing down, using bitcoin in an investment portfolio may help you get a leg up in other areas that you want to invest in for the future.
4. Hard assets benefit any investment portfolio
Commercial industrial real estate gives your portfolio the benefit of a hard asset with intrinsic value. This can offer your capital a hedge against inflation, and ensure a constant stream of stable income for many years. When the market feels risky, it’s often wise to have hard assets in your playbook.
5. Appreciation multipliers
Commercial properties are valued based on their Net Operating Income (NOI). Investors/property managers can drive up the NOI through the addition of value on the property. Ways you can up you NOI include: upgrading your buildings, adding square footage, reducing operating expenses, adding amenities, and raising rents. A wise investor can really up their NOI through careful adjustments and diligent care of your commercial industrial properties.
If you’d like help with building your portfolio, contact us today! We’d love to speak with you.
