For decades, apartment buildings have been the go-to investment choice for seasoned investors. Depending on the location and other factors, these residential properties generate consistent rental income and a high return on investment. However, in recent years, mixed-use apartment buildings have become incredibly popular among investors for different reasons.

In this post, we’ll explain what is a mixed-use building and share the benefits of investing in one.

What Is a Mixed-Use Apartment Building?

A mixed-use apartment building is mainly a residential property with different types of commercial properties on the bottom floor. Examples include offices, restaurants, retail stores, and more. These buildings are quite popular in urban cities where commercial space in residential areas is in high demand.

4 Reasons to Invest in an Apartment Building With Retail Space

1. High Traffic and Demand

Investing in a mixed-use apartment building with retail stores means bringing retail spaces closer to residents. This translates to more convenience as their basic needs are now accessible within walking distance. Plus, retail stores below apartments offer a more pedestrian-friendly experience and allow business owners to enjoy consistent traffic and high levels of sales. You can charge a higher rent to business and residential tenants in return for these benefits.

2. Property Value Appreciation

Retail stores and other commercial spaces like restaurants and offices below apartment buildings add more value to the mixed-use building. These buildings are usually situated in high-demand commercial areas where tenants seek accommodation near their workplaces. As a result, you can expect apartment buildings with retail space to appreciate much quicker than traditional apartment buildings.

3. Income Diversification

Combining residential and commercial spaces into the same building can create multiple revenue streams and diversify your income. Retail stores below apartment buildings typically have a much higher rent than apartments since they’re commercial and usually bigger than standard apartments.

4. Less Risk and Higher Sustainability

The high demand and multiple income sources make mixed-use apartment buildings a less risky investment than other options. Plus, you can put all your eggs in one basket without actually putting your eggs in one basket. From a sustainability viewpoint, having commercial spaces close to apartments increases walkability and reduces the need for driving, limiting pollution.

Wrapping Up

Investing in an apartment building with retail space is a smart choice. You can diversify your rental income and reduce your investment risk significantly. Moreover, you can stay up-to-date with modern consumer demands and market conditions to best use your residential and commercial space.

For more interesting reads related to real estate investing, tune into CHRE immediately. You can also explore our vast options of mixed-use apartment buildings in Rio Grande Valley.