Commercial real estate investments can become a lucrative source of income. By choosing to become a passive investor, you get the comfort of earning from your initial input without needing to invest your time and effort constantly.

However, commercial real estate investments do need careful consideration. Before you decide, you need to carefully explore the types of commercial real estate for investments with your broker to know which ones will suit your portfolio.

Types of Commercial Real Estates for Investment

Your commercial real estate broker will always look at your existing portfolio and needs before they move forward with any suggestions. Below are the main types of commercial real estates you can choose from:

1. Multifamily Buildings

Multifamily buildings are a popular type of commercial real estate investment because residential buildings nearly always have a market. Some of the most common categories within multifamily buildings are:

  1. Multi-unit Rental Properties – Duplex, Triplex, and Quadruplex
  2. Apartments– Mid-rise and High-rise

As an investor, you can buy one or more of the units or apartments and earn through the rent tenants pay or through value appreciation. When renting out, you can employ an agency to handle the routine engagements to save your time.

2. Offices and Warehouses

Offices and warehouses are lucrative investments because they have triple net leases and carry a higher monthly return. Your clients will be businesses rather than individuals, and the properties are of a higher class with better facilities. Your monthly compensation will include rent, taxes, maintenance costs, and property insurance.

3. Hotels

Hotels are expensive commercial real estate investments, but they are also very lucrative. Because of their commercial earnings and value, your broker can negotiate a deal where you also get a percentage of their monthly sales in addition to a fixed rent.

However, hotels are generally a premium type of commercial real estate property and risky. Hence, you will need to have a sizeable budget and willingness to take risks to make the initial investment.

4. Retail Spaces

Retail spaces offer another premium but extremely lucrative type of commercial real estate investment. These properties are usually shopping malls and shopping centers, making your clients businesses exclusively. They also carry triple net leases which will reduce your risk and allow you to earn more over time.

5. Land

Land investments are a low-risk and low-return investment compared to the others on the list. However, they have the potential to be more lucrative. If your land is in an area that starts becoming more developed, its value will increase allowing you to make a sizeable profit.

Conclusion

To sum up, the types of commercial real estate investments vary in terms of risk, return, and potential. Ideally, your portfolio should be a mix to distribute your risk and increase your profitability.

If you want to explore commercial real estate investment opportunities in Rio Grande Valley, please get in touch with us. Our team will be happy to help you make the best choice.