Industrial property is a great investment opportunity. If you are looking for a way to grow your portfolio, this is a great option. In this blog post, we will discuss the basics of investing in industrial property and why you should consider doing so. We will also provide some tips on how to get started. So, if you are interested in learning more, keep reading!
If you’re looking for a great way to invest your money, industrial spaces may be the answer. Industrial property can be a lucrative investment because it has many different uses and can be rented out to many different businesses.
Key Takeaways
- The other four classes of commercial real estate are office space, industrial, multifamily rentals, and retail.
- The term “industrial real estate” refers to any land and buildings that are used for industrial activities like production, fabrication, assembly, storage of goods, research, stockpiling, and allocation.
- Mixed-use property is a type of real estate that combines commercial, residential, and even industrial units at times.
Table of Contents
What is Industrial real estate?
The term “industrial real estate” refers to any land and buildings that are used for industrial activities like production, fabrication, assembly, storage of goods, research, stockpiling, and allocation. This is a broad definition, but it captures the essence of the term.
Industrial Property Investment: How to Get Started
Define your motivation and investment criteria
If you’re thinking about investing in industrial property, it’s important to understand what motivates you and what your investment criteria are.
First, define your motivation.
- Why do you want to invest in industrial property?
- Do you want to make money?
- are you more interested in getting a good deal on a large piece of land?
- Do you have specific plans for the land or building that will help dictate where you decide to invest?
- Is there a particular type of business or industry that interests you?
Next, define your investment criteria.
- What are the things that are most important to you when deciding where and how much money to put into an asset, such as building size or location?
- What kinds of returns on investment do you expect from this type of investment?
- How long do you want the investment to last?
- do those expectations align with your motivations?
Secure Financing From A Lender
If you’re ready to take the leap into industrial property investment, your first step is securing financing from a lender.
Industrial property investments are typically made with commercial real estate loans, which are provided by banks and other financial institutions. These loans are usually long-term, low-interest loans that can be used for multiple purposes. This means that you can use the loan to buy your industrial property, as well as make improvements or renovations to increase its value over time.
When you’re getting started with industrial property investment, it’s important to have a good credit score so that lenders will be more willing to work with you. If your credit score isn’t great, consider taking steps toward improving it before applying for an industrial property loan—you’ll want to be able to show that you can responsibly manage your finances before asking for money!
Hire A Team Of Trusted Professionals
Hiring a team of trusted professionals is the best way to ensure that your industrial property investment will be successful. A team will help you navigate the complex landscape of the industrial real estate sector and make sure that you are protected when it comes to things like legal issues and accounting.
Seek good opportunities
For industrial real estate investors, there are plenty of good opportunities out there. Industrial properties are typically in high demand, so there is no shortage of potential investments.
You can find good industrial real estate opportunities by looking through local real estate listings, or you could even reach out directly to companies that need warehouse space or office space for their business. By taking the time to seek out good industrial real estate opportunities, you can set yourself up for success as an industrial property investor.
Find The Perfect Opportunity
Finding the perfect opportunity is a great step to making a great investment. To do this, you will want to consider several factors, including:
Location. You need to find a location that has good accessibility and is located in an area where there is growth potential.
Property Size. Look for properties that are large enough to accommodate your needs but small enough so that the rent can be paid easily by industrial tenants.
Property Condition. Make sure that any property you invest in is structurally sound and in good condition.
Run The Numbers
The next step to investing or owning industrial property is to run the numbers. You want to know how much money you can make from the investment, and whether or not it makes sense for you.
There are a few ways to do this:
1) Determine if your target market can support the investment. What is the average rent per square foot in that area? Is it going up or down? What is the vacancy rate? How many other industrial investors are there in your area?
2) Determine if there’s enough space available for your business needs. Will you be able to lease out part of an existing building without having to start from scratch? Or will you need more space than what’s currently available on the market? Do you have enough capital reserves (i.e., money) to do so if not?
3) Determine if any other obstacles could get in the way of making this investment successful. Are there any zoning restrictions that would make it difficult for your company to operate within its proposed parameters? Are there any other companies nearby that might compete with yours for resources or customers? What about major construction projects nearby that could affect traffic flow or accessibility to your business?
4) Check in on the potential property’s rental history. If it’s currently occupied by a tenant, ask for copies of their lease and other documents related to their tenancy. You can also ask for references from past landlords or real estate agents who have worked with this particular unit before.
5) Find out if there are any liens on the property that need to be cleared off before you buy it.
Make An Attractive Offer
When you’re ready to make an offer on a piece of industrial real estate, your next step is to find a real estate agent. A good one will be able to help you find exactly what you’re looking for, and keep things moving along as smoothly as possible.
If you don’t have experience in this area, it might be hard to know who’s a good fit for your needs. Here are some tips to help you find the right broker:
1) Ask friends and family if they can recommend anyone they’ve worked with before.
2) Check out their website or do an internet search for reviews of their services.
3) Look at their LinkedIn profile—does it seem like they are an expert in the field? If so, then they may be someone worth talking with further!
Future-proof your investment
If you’re thinking about buying industrial property, it’s important to know that you’re making a smart investment. You’ll want to think about how your purchase will be affected by the future, and how you can protect yourself from any changes in the market.
Here are some things you should consider:
- What do other investors think about this area? What does the data say?
- Is there room for growth in this community? If so, how much room?
- Are there any plans for development in the area? If so, what kind of development will it be (i.e., residential or commercial)?
- How stable is this area’s economy? If it’s prone to fluctuations or downturns, what can you do to protect yourself against them?
Understanding Mixed-Use Property Investing
Mixed-use property is a type of real estate that combines commercial, residential, and even industrial units at times. This type of property is known as a “mixed-use development.” Investors can profit from multiple types of real estate through the use of a single investment vehicle thanks to this.
Mixed-use developments frequently include properties that are complementary to one another, such as a hotel that also contains retail stores and a fitness center. Or a residential complex that is within easy walking distance of the neighborhood’s shops and restaurants.
The need for residents to own a car may be diminished or even eliminated as a result of these developments, which results in increased convenience for the residents. A multi-use property typically generates better long-term performance and results in higher returns, which is important to consider from an investment point of view.
Tax Benefits Of Industrial Property Investing
The potential tax benefits that come along with an investment are one of the advantages that come along with commercial real estate investing.
These advantages present potential opportunities for investors to reduce or postpone the amount of income and capital gains tax that is due on their investments by taking advantage of these benefits.
These benefits, which may include depreciation, deductions for mortgage interest, and tax advantages for an investor’s beneficiaries, have the potential to increase returns. However, to take advantage of these benefits, you will need to have an understanding of what they are and how they function.
The Other 4 Types Of Commercial Real Estate
1. Office
Offices are the most common type of commercial real estate. They are generally rented by businesses or individuals who need a space where they can work, store their equipment, and meet with clients.
Offices can be located in an office park, typically a single building or group of buildings that house multiple tenants. They can also be found in an office building, which is a standalone structure that houses only one or two companies.
2. Retail
Retail is a type of commercial property that includes businesses that sell products directly to consumers. It can include stores, restaurants, salons, and other services. Retail properties are typically large buildings or spaces that have a lot of visibility and traffic.
3. Multifamily
Investors who want an additional source of monthly income in addition to a gradual but consistent appreciation in the value of their portfolio should consider investing in rental property. This is the best investment strategy for a real estate investor who has these goals. Single-family homes and multi-family dwellings are the two primary categories of residential real estate properties in which an individual may choose to invest.
Single-family properties are residential buildings that have only one unit that is available to rent, whereas multi-family properties, which are also commonly referred to as apartment complexes, are residential buildings that have more than one space that is available for rent.
4. Special Purpose
When referring to real estate, the term “special-purpose property” refers to real estate that has restricted utility and marketability in contexts other than its primary use. A toxic waste facility, an oil company, or a highly specialized manufacturer could be among these properties.
Investing in industrial property FAQs
Is it good to invest in industrial property?
industrial real estate investing is a good asset because it can provide you with a steady income, and it will hold its value over time. Industrial property is generally more expensive than residential property, so it’s a great way to diversify your real estate investments while still making money.
What makes a good industrial property?
Good Industrial properties have open boxes, high ceilings, and multiple loading docks. These buildings are ideal for manufacturers and large-scale retailers. Industrial real estate features loading docks.
What are the 3 types of industrial properties?
Industrial real estate usually is divided into three categories: manufacturing, storage and distribution, and flex space. These properties have 8 different kinds of industrial buildings.
How do I choose the right investment property?
When choosing an investment property, it’s important to take into account the following factors:
Location: You want to make sure your property is in a location that will draw people in and keep them around.
Size: You’ll also want to think about what size of space would best suit your needs.
Zoning: You’ll need to make sure your property is zoned for the type of business you plan on operating.
Condition: You’ll want to inspect the property and make sure it’s in good condition before you make an offer.
Now that you know a little more about industrial properties, you may wonder how to invest in one.
Why industrial real estate is booming?
The reason for this is simple: the manufacturing industry is growing, and so are the needs of businesses that work with manufacturers
Manufacturers are looking to expand their operations to meet skyrocketing demand. As they do so, they need more space—and that means they need more investing in industrial real estate market.
Conclusion
Industrial property can be a great investment for your business. By understanding the different types of industrial properties and their benefits, you can make an informed decision about which type is best for you.
Additionally, there are several factors to consider when investing in industrial property, such as location, size, condition, and zoning.
Our team at ToljCommercial is here to help you navigate the process and find the perfect property for your needs. Give me a call or schedule a free consultationr today to get started!
