Have you been thinking about trying your hand at real estate investing? Maybe you should start with something more complicated, like industrial or commercial real estate investing.
Investing in industrial real estate might be more complicated than investing in residential properties, but the payoff is a lot more lucrative.
You just have to know what you are doing. This article will be a short guide on how you can start to invest in industrial real estate.
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Before we discuss how to invest in industrial real estate, we have to define what it is and why you should put your money into it.
Industrial real estate is composed of buildings and land which are used for industrial activities like manufacturing, storage, distribution, and even research.
These types of properties are very much in demand right now, particularly warehouses. Retail giants need structures to store their products which are then sold to consumers, increasing the necessity for storage.
Compared to other types of commercial space, these are cheaper to build, so it is easier to get started with investing in industrial real estate. Tenants for industrial properties usually go for long-term leases, which means you will have less to worry about when it comes to managing the property.
Here are some ideas on how you can get started with investing in industrial real estate.
With value-added investment, you are taking an existing property for renovation. What you can do is look for an outdated industrial structure and then add improvements to it so it can be brought up to industry standards. When done correctly, value-added investment can make a lot of money for you.
The technique is to check the structure with a contractor before buying. You need to have a rough idea of how much it will cost to have it improved to the level that it can be used by companies.
Under this investment method, you will be buying a property that is already on the market. It could be available for lease or is already on lease.
Before making a purchase, you have to make sure that the returns will be enough to cover your investment. Moreover, many investors use this method to increase their assets.
This is by far the most complicated investment method that you can go for. However, the returns of building your own industrial structure will be substantial.
The demand for industrial real estate is so high that building one has a lower risk compared to other types of properties. You just have to make sure that the location of the property is going to be accessible to the users. If you are building a warehouse, make sure that it is accessible to trucks for ease of logistics.
You need to find a piece of land that has not been developed yet. You can also choose one that has been previously developed, but that can be more complicated. You have to be aware of what the zoning laws are in your area before you purchase the land.
After that, you need to determine the cost of developing an industrial structure there. You need to come up with a building design that will help you determine the cost of the project. This is where having a good contractor can help you out. If you think that the cost of building the structure is something that you can recover when you lease the property, then go ahead with the project.
In addition, keep in mind that you will need ample parking for the structure because the trucks that will be delivering the goods should have ample space to maneuver.
On the other hand, you may think that maintaining an industrial property might seem complicated, but it's not. Remember, these usually go for long-term leases and the complicated part is actually building them.
Are you interested in industrial and commercial real estate investing? Get in touch with us and get the help you need to achieve your financial goals.
When you want to get started with real estate investing in the right way, you need to go with the best and that's what our team is all about.
Reach out to us, fill out our online form or contact us at 949-881-7128 at Saint Investment Group today!
A master in Investment, Marketing, and Capital Raising.
Nic has honed his focus on the Real Estate and debt markets with Saint Investment Group and pursues large-scale Distressed Asset purchases with his partners and syndications.
