If you have some land to develop, you might be wondering what the best commercial property types are to build. While the answer may vary depending on your location and the specific needs of your business, there are some general guidelines you can follow. Renting out your commercial property can let you earn about a 10% net return on investment, making it a wise choice for many property owners.
This blog post will look at some of the most popular commercial property types and discuss their pros and cons.
1. Office Buildings
Office buildings are one of the most common commercial property types. They can be used for various businesses, from small to large corporations. One of the main benefits of constructing an office building is that they typically have high resale value. Many companies are willing to pay top dollar for a well-located office building. Another advantage is that office buildings can be easily converted into other commercial property types, such as retail space or apartments.
However, they can also be expensive to build and maintain and often require significant land. They can also be difficult to fill if your location is not desirable to businesses. You want to make sure you do your research before investing in an office building. Look at the surrounding area and ensure there is a demand for office space in that location.
2. Medical Office
Many healthcare professionals are looking for medical office space. Due to the specialized nature of the business, these types of buildings often come at a premium. A medical office construction can cost between $200 and $400 per square foot, making it one of the more expensive commercial property types to build. But it can be a very lucrative investment if you have the right location.
The main advantage of medical office space is that it tends to be very stable. Even in an economic downturn, people still need medical care. You can easily convert this type of space into other medical uses, such as a dental office or a physical therapy office. However, you need to make sure you are accessible to patients and that your location is in a desirable area.
3. Retail Stores
Retail stores are another popular type of commercial property. They tend to be less expensive to construct than office buildings and can be built on smaller parcels of land. However, they typically have lower resale values than office buildings and may require frequent maintenance and repairs due to the wear and tear associated with retail businesses.
It would be best to consider the surrounding area before investing in a retail store. You want to ensure you have enough land to accommodate parking and other necessary infrastructure. This is important for both customers and employees. You also want to ensure your store is located in a high-traffic area with good visibility. Depending on the type of business, you may also want to be located near other companies that complement your products or services.
4. Industrial Buildings
Industrial buildings are designed for businesses that need a lot of space for storage or manufacturing purposes. They’re often constructed from durable materials like concrete or metal and typically don’t require as much maintenance as other commercial buildings. One downside of industrial buildings is that they can be difficult to resell if your business outgrows them or changes ownership due to the specialized nature of the space.
Not every city will allow you to construct an industrial building, so you must check your local zoning laws before investing in this type of commercial property. Industrial facilities can cause environmental pollution, so there are often strict regulations surrounding their construction and operation. But an industrial building can be an excellent investment if you have the right location and your business is suited for this type of space.
5. Multi-Unit Dwellings
Multi-unit dwellings, such as apartments or condominiums, are becoming increasingly popular as commercial investment properties. They tend to have high resale value and offer a consistent income stream through tenant rent payments. However, they also require significant ongoing maintenance and repair work to keep tenants happy and prevent vacancy rates from becoming too high.
Some cities have strict regulations surrounding the construction of multi-unit dwellings, so you need to do your research before investing in this type of property. You also need to understand the local rental market well to ensure you can charge enough rent to cover your expenses and generate a profit.
There are a variety of different commercial property types that you can choose from when deciding how to develop your land. The best type for your business will depend on factors like budget, location, and the specific needs of your business. However, if you research and choose wisely, investing in commercial property can be very lucrative.