Though it is a profitable sector, real estate investment involves more than buying and selling houses and lands. There are several crucial choices you need to make with the type of property being the most important. There are non-income and income-generating properties.
Income generating properties give you an income in the form of rent, while non-income generating ones are profitable in the capital gained from their sale. Look up ‘property consultants near me’ to help you in making a wise decision before committing to any investment.
Apart from residential properties, Leechiu Property Consultants sites other income-generating assets you can venture into.
These can be rented for storage, research, development, manufacturing among other uses. Industrial real estate investments have lower operating costs and are less management intensive compared with retail and commercial ones.
Closeness to major transport routes, building configuration, and functionality are among the key factors that will influence your occupancy rate.
In retail property, your income is based on a percentage of the profits generated by a retailer. This property is food or grocery-anchored as food and grocery stores are the main baits for customers.
Retailers have longer leases. As such, returns from retail property investments are more stable compared with industries and offices.
This refers to office buildings. Location is the most critical factor from commercial properties, and proximity to city centers is exceptionally profitable. This sector is however extremely vulnerable to economic fluctuations and is only reliable in stable and good economic times.
Commercial properties also have high operating and maintenance costs, hence losing even one tenant might significantly hurt your income.
Experts recommend investing in income-generating properties for new real estate investors. This is because non-income generating properties have an ‘opportunity cost.’
This is a term used to define the cost of missed opportunities in real estate. This cost typically amounts to much more than your resale value for non-income generating properties, even if they appreciate in value.