Investment properties are an excellent way to build wealth over time. With the right property in your portfolio, you can enjoy a passive income stream while also potentially benefiting from capital gains. However, it’s important to understand which kinds of properties are best for your unique goals and skill set. Let’s explore some of the best investment properties for 2023 and beyond.
Types of Investment Properties
Investing in commercial real estate can be an exciting prospect with many possibilities. In an ever-changing world, current and future market trends should always be top of mind when looking at any property. Investment properties like multi-family buildings, retail spaces, industrial spaces, and vacant lots each have unique benefits and drawbacks to consider.
1. Office Space
Office spaces feature a wide variety of desirable layouts and amenities worth considering. They’re popular among lawyers, accountants, primary care physicians, insurance agencies, entrepreneurs, and many other small businesses. Commercial office buildings generally include several floors, and their individual units are often available for lease at reasonable price points.
While some office spaces in the United States are experiencing double-digit vacancies, Omaha and our local market are in a much more favorable position. This is likely because many companies in Lincoln and Omaha, Nebraska, prefer in-person and hybrid work structures rather than fully remote organizational models.
Office space remains a profitable commercial investment in our local market also partly because we have countless more small businesses than large corporate office users. It’s also worth noting that smaller office spaces and those located near the edges of Lincoln are much more popular than larger spaces and those found downtown.
2. Retail Space
Retail space accommodates businesses that require a physical location to sell their goods and services. These properties include strip malls, shopping centers, and standalone storefronts. Investing in retail space can provide a stable stream of rental income as well as the potential for long-term appreciation of the property’s value.
One of the key advantages of investing in retail space is the high demand for commercial property in prime locations with constant foot traffic. Retail tenants are always looking for high-visibility locations to attract the attention of potential customers. As population densities increase over time, retail spaces generally gain demand in growing cities and suburbs.
Investing in retail spaces has proven to be highly rewarding for many investors. However, some properties have also encountered vacancies due to booming competition from larger retailers and e-commerce websites. Before investing in any retail space, we recommend conducting a market analysis to assess the profitability of any prospective investment property.
3. Industrial Space
Industrial space includes buildings zoned for manufacturing, warehousing, data centers, and distribution. Investing in one of these spaces requires careful consideration of the property’s type, location, and features.
Property type is one crucial factor to consider when investing in industrial space. There are several types of industrial properties like factories, warehouses, and distribution centers. Manufacturing properties typically require specialized building features and equipment to support production needs. Warehouses provide long-term storage of goods and materials in a variety of industries. Lastly, distribution centers manage the movement of goods across supply chains, waterways, shipping networks.
The location of any industrial space is also critical for its success since this will determine the property’s general appeal. Locations featuring strong economies, burgeoning populations, and proximity to transportation centers will likely experience higher demand than isolated or inaccessible areas.
In recent years, investing in vacant lots has become a popular trend for those looking to enter commercial real estate. These lots can provide a wide range of opportunities such as resale, agriculture, and various commercial developments. While vacant lots are often long-term investments, they can certainly be profitable ones.
When choosing a vacant lot to invest in, you must look for locations that’ll experience significant growth and development in the near future. A lot located near an up-and-coming neighborhood or commercial district is ideal. You should also consider factors like accessibility and nearby amenities like parks, schools, and public transportation.
Once you’ve found a promising location, it’s time to assess the lot itself. Research how the property’s size, shape, topography, and zoning restrictions could affect potential developments. Don’t forget to evaluate the lot’s condition and whether any environmental issues will prevent construction.
Ask Us about Investment Properties
Investment properties can be an excellent way to build wealth and secure your financial future. Multi-family complexes, retail spaces, industrial buildings, and vacant lots are all practical investment properties in 2023 and beyond. Remember to stay up to date on current market trends and look into profitable property types before committing your funds to any commercial investment.
If you’d like to expand your portfolio or simply discuss the benefits of investment properties, then please feel free to contact us online or give us a call. We’re always eager to empower our community and make the dream of owning real estate investments a reality. Our team proudly supports each client through creative insights, strategic thinking, and industry expertise, and we’d love to help you get started today.