Everyone who enters the world of commercial real estate hopes that their business is profitable or the value of their commercial property rises, but some investments tend to have a much greater return on investment (ROI) than others. So which properties should you invest in if you’re looking to boost your bottom line the most? We take a closer look at which commercial properties tend to be the most profitable in today’s blog.
Commercial Properties With The Best ROI
Before we dive into the nuts and bolts of this blog, remember that this is just general information and should not be considered actual investment advice. A bunch of highly individualized market conditions will determine which property has the best potential for investment return in your area, so do your own research before deciding where to invest your money. With that said, here’s a look at some types of properties that many commercial investors tend to target because of their high ROI potential.
- Larger Apartment Complexes - A large apartment complex or any multi-tenant property has the potential to generate large returns on a regular basis. The more occupants you have, the more money you can collect each month in rent. However, the greater the scale, the higher the risk if something goes wrong, like a major property issue or economic factors that leave you with unfilled vacancies.
- High-Traffic Commercial Businesses - Commercial space in a highly trafficked area is also a lucrative opportunity for commercial investors. Projecting how an area will likely grow in the coming years can lead investors to snatch up coveted real estate that provides them an opportunity to sell the property for much more down the road, or start a business in an area where customers are plentiful.
- Triple Net Leases - As we’ve talked about on the blog in the past, there are a few different types of lease agreements that you and your tenant can come to when working out a deal. If you put your faith in a successful company, a triple net lease can be quite the investment. Not only are these lessors regularly paying rent, but they also pay for other expenses related to the property, like insurance, property taxes and routine maintenance.
- Properties With Clean Titles - We’ve found that our clients who are attempting to sell their commercial property can generally get more money for their sale when the title and property is free from potential defects. Of course we’ll work to clear a title and keep it clean, but also taking the time to address any issues like existing easements, zoning concerns or land use issues can all make a property more enticing to a potential buyer, which can boost your eventual sale amount. We can help with all aspects of these title and property encumbrances.
Finally, one way that you can protect your bottom line and avoid a financial headache is by purchasing a commercial title insurance policy for your property. This one-time fee will ensure you are financially protected against legitimate or fraudulent claims against your commercial property for as long as you own the space. This peace of mind and financial protection is vital for financially-savvy commercial investors.
For more information about protecting your interests during your next commercial acquisition or sale, reach out to the experienced team at Commercial Partners today at (612) 339-2470.