Commercial Real Estates You Can Invest In

Commercial real estate is property used to generate a profit whether through rent or investment income. It can be a great way to make money as businesses are always looking for a place to set up shop. Rental income can be high especially if the structure is located in a prime location like a financial district.

Commercial real estate comes in different forms and whether you're a buyer or a seller you need to know what's what. Here's a short list of the various types of commercial properties you can invest in.

Retail centers

Retail centers are a great source of income because space is usually leased on a long term and under a triple net lease. This means that aside from the rent, lessees pay (either some or the full amount) for maintenance, insurance, tax and other expenses the real estate owner would otherwise have to incur.

A big advantage of investing in retail centers is that you don't stand to lose if taxes go up. In fact, the opposite is true as most rental increases are included as part of the lease agreement. So, if tax is hiked, lessees have to pay more which increases your returns.

This type of real estate includes shopping centers, malls and other retail outlets mainly for the sale of lifestyle products and electronics.

Offices and warehouses

Offices and warehouses are another great way to make money. Buildings can be small office buildings, high-rises and single-tenant properties to name a few. Like retail centers, they have triple net leases which work to the investor's advantage.

A point to note about triple net lease is that it's locked for a specific period, for example, five or ten years. To protect the lessee, any growth not affected by tax or increased expenditure will not see you receive higher returns unless the lease agreement expires and is renewed. However, this isn't a huge disadvantage because you still see stable returns.

Apartment buildings

Also known as multifamily properties, apartments are a good investment because they're readily available for sale, and can be resold or leased. Loans are more easily processed since banks usually don't hesitate to lend on them. They're cheaper to purchase than constructing retail centers and large office and warehouse buildings.

Special purpose

Special purpose properties are those that don't fall under the rest mentioned above. They include real estate intended for health care centers, schools, day cares, car washes and self-storage. They're limited market properties as they're constructed to suit specific requirements. Investors tend to choose other types of real estate but special purpose properties can give good returns on long-term leases.

Hotels and resorts

Hotels and resorts should only be invested in if you know what you're doing. They can give handsome returns but can also be a big loss because there are more regulations and rules to contend with. Unlike with retail centers and offices, for example, hotels and resorts have to be managed as a business rather than being merely purchased and leased out or sold.

Land

Buying and selling land is a good step to setting you on the road to real estate investment. Unlike the rest, land refers to undeveloped real estate that may be sold as is or developed to include buildings. It's a long process but one which has the potential to allow the reaping of very high returns.

Real estate in Toronto is the most profitable investment proposition available with the potential to render huge returns on investments. To find lucrative commercial properties to invest in, visit this site!