Investing in commercial real estate is a rewarding career that takes a great deal of strategy. There are numerous types of properties in which to specialize, and various ways to go about investing in them as well. Here are some of the most established types of commercial property investment strategies.
The BRRRR method is one of the most famous. It is an acronym that stands for Buy, Rehab, Rent, Refinance, Repeat. An investor buys an undervalued property, renovates it, rents it out, and after building it up in this way, pulls all the capital out of the investment. This method works with both single-tenant and multi-tenant properties.
Land banking is the idea of earning money based on land appreciation. An investor buys land in the path of development, hoping that his plot increases in value as the development progresses toward it. Then, the investor can sell the property at a higher price than he paid.
Another strategy is to buy and develop the land, and increase its value this way. You will need a commercial real estate team to help guide you through the process. In the end, the property will be far more valuable than it was before.
Buy & Hold
The buy & hold method is simply to buy commercial real estate and hold it for a long time. Development could occur in this strategy, but its main focus is to gain revenue through excellent tenant-owner relationships.
Fix & Flip
Just like with residential properties, one can fix and flip a commercial one too. This strategy is one step shorter than the BRRRR method. One buys a fixer-upper, renovates it thoroughly, and then sells it directly.
Similar to buy & hold, an owner might occupy the commercial property with his own business, besides several tenancies. The owner’s business and the tenants’ rent can help pay for the mortgage.
One of the most desirable commercial property investing strategies is to make a passive income. Real estate is one of the most lucrative areas in which to make a passive income. For more information on how to increase your passive income portfolio, contact Clagett Enterprises.
Trust the Professionals at Clagett Enterprises for Your Realty Needs
If you’re looking for an experienced property management company, the perfect realtor for your property, or a professional to assist you during your purchase of any home, you can rely on Clagett Enterprises. Clagett Enterprises is a full-service real estate company with almost 30 years of experience in the Frederick and Western Maryland area. For assistance with commercial sales, leasing, management, and development and consulting, contact us online or give us a call at 301-665-6009. To meet our team and see some of our beautiful homes, follow us on Facebook and Linkedin.