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Why You Should Invest in Industrial Property
Commercial real estate that is classified as industrial consists of practical and efficient spaces in a variety of shapes and sizes. Manufacturing, warehousing, logistics and distribution, research and development, labs, showrooms, and telecom facilities are just a few of the uses for these properties. It may not seem glamorous to invest in an industrial property, but industrial real estate is an extremely lucrative sector of the commercial real estate market. Here are the top 5 advantages of an industrial property investment:
High Demand Investors are becoming more interested in industrial properties. Compared to other commercial properties, fulfillment centers (e.g. Amazon) and big-box warehouses are less vulnerable to market downturns.
Long-Term Tenants The average industrial tenant typically signs a longer lease than a residential tenant. Most industrial leases last between three and ten years. As a result, the longer the lease lasts, the more investment stability the investor has.
Higher Yields Investors may have an increased ROI because leases are longer, market fluctuations are fewer, and turnover is lower. Rental rates for industrial properties are also higher, resulting in higher yields.
Low Maintenance Compared to other commercial spaces, industrial spaces are relatively easy to maintain. This type of tenant is usually handy, and unless there is an issue larger than they can handle, they will often fix maintenance issues themselves.
Things to Consider There are many benefits to investing in industrial real estate, but there are also things you must consider before making a decision. There is a high cost associated with investing in industrial spaces, as well as a high interest rate. Is your capital sufficient to finance it? Did you consult with an Advisor who specializes in this area of expertise?