Industrial Property Investing: 10 Items to Consider
Industrial property investing involves some of the most diverse and versatile commercial real estate on the market today. Industrial properties serve as bases of operation for manufacturers, distributors, logistics and transportation businesses, research and development labs, telecommunications, showrooms, and much more. There are a number of considerations to take into account when investing in industrial properties, such as:
1. Higher ROI
Industrial properties tend to have a higher ROI compared to residential rentals. Not only is the space in high-demand, but the turnover is a lot lower.
2. Longer Leases
The average occupancy of an industrial property by a tenant ranges from three to ten years. Compared to residential rental properties, which may see tenants moving in and out every year, industrial real estate offers a much more stable investment.
From Amazon fulfillment centers to places to house construction vehicles, self-storage businesses, and everything in between, people need a place for their stuff. Labs, tech centers, and manufacturers also need places to operate which are removed from houses and storefronts. Because of this, industrial properties are in high demand and are more resistant to economic downturns than other types of commercial real estate.
4. Low Maintenance
The tenants who lease industrial properties typically have their own maintenance people, or at least standing contracts with maintenance companies. Commercial real estate investors typically have to worry about very little when it comes to repair and upkeep on industrial properties.
5. Net Lease Options
Most industrial tenants sign net leases, meaning they pay for insurance, utilities, maintenance, and similar expenses. Net leases lower the overhead costs for property investors.
6. Multiple Tenants
Not all industrial investments need to be leased to a single tenant. Investors can make the necessary renovations to house two or even three different tenants on a single property. This creates a buffer so cash flow doesn’t completely dry up if a tenant moves out.
7. Increased Value on Industrial Investments
E-commerce isn’t going away anytime soon. In fact, the growth among internet retailers is driving the need for industrial properties, as mentioned above. As such, industrial investments will only increase the value of your portfolio.
Industrial properties are large boxes, and the interior can be anything the tenant needs, provided the right zoning. Warehouses can become manufacturing plants and vice versa. Fulfillment centers can be turned into telecom buildings. The best part is that the tenants typically pay for any special build-outs they need.
9. Economic Expansion
Business growth is on the rise, and instead of trying to hunt down suitable office space in the heart of any city, it makes more sense for businesses to lease part or all of an industrial property. Investors will not be at a loss for tenants.
There are a number of technological innovations which are going to require industrial properties for research and storage. 3-D printing is among the forerunners in the technology and manufacturing sectors – providing everything from durable medical equipment to robotics. These upcoming industries will need adequate facilities and will be looking at industrial properties to set up shop.
CounselPro Lending provides the funding solutions needed to acquire and even build industrial facilities. Contact our offices today and start growing your portfolio and revenue stream today with industrial investments.