Is Commercial Real Estate a Good Investment in Lawrence KS?
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If you want to get started in real estate investment, you will be faced with a choice between exploring the world of commercial real estate or investing in the more familiar area of single-family homes. Each real estate investment strategy offers potential for profit — but commercial real estate presents its own set of benefits and has the potential for incredible success in college towns like Lawrence, KS. Potential investors may be asking — is commercial real estate a good investment in Lawrence, KS — and experienced realtor Jackie Giroux is here to guide you through this dynamic market and help you find the ideal properties to maximize your returns.
What Is the Definition of Commercial Real Estate?
Before you decide to invest in commercial real estate properties it is important to understand the type of properties you may be investing in. Commercial real estate is a broad category of real estate that is primarily used to define properties for business purposes. Real estate included in this category encompasses various property types that each provide investment and profit potential.
Office — From high-rises to small professional suites, these spaces cater to businesses of multiple sizes and are divided into three classes. Class A, Class B, and Class C office buildings are defined by the NAIOP Commercial Real Estate Development Association.
Retail — Shopping malls, strip malls, box stores, and single-tenant stores fall under this category, serving consumer needs in the community by providing products or services. Retail properties are a high-performing segment of commercial real estate.
Industrial — Warehouses, factories, and distribution centers are essential for manufacturing and logistics operations, and just a few examples of industrial real estate. Industrial properties provide the benefits of long-term lease opportunities.
Multifamily Housing — Apartment complexes, town houses, duplexes, and condominiums provide rental housing options for residents and are a key investment opportunity in college towns like Lawrence, KS.
Mixed-Use — Mixed-use real estate includes buildings with multiple uses that can serve different purposes for tenants. This may include an apartment building with retail or office space located on lower levels.
What Are the Benefits of Investing in Commercial Real Estate?
Commercial real estate in a market like Lawrence offers a wealth of benefits for potential investors. The benefits of investing in commercial real estate include the potential for higher returns compared to residential properties due to the stability of longer lease terms, reduced maintenance costs, a more diverse portfolio, and attractive tax benefits. Add an upward trending market that is fueled by average population growth of 1.15% annually over the past nine years and a steady increase in residential rental prices of 2.10% to the equation and it makes Lawrence, KS attractive for commercial real estate investment.
Higher Returns — Commercial properties often generate higher rental income and appreciation compared to residential properties with an average return on investment of 9.5% depending on select property factors.
Longer Lease Terms — Commercial leases generally span multiple years, providing investors with stable and predictable cash flow that has the potential to last well into the future, providing you with passive income.
Tenants Responsible for Maintenance — In many cases, commercial leases shift the burden of maintenance and repairs to the tenants, which reduces your need to be hands-on with the property as the investor.
Diverse Portfolio — When you invest in commercial real estate it gives you the chance to diversify your portfolio, reduce the risk, and hedge your bets against economic changes like inflation.
Tax Benefits — Various tax deductions and depreciation benefits can help offset ownership costs and enhance profitability when you invest in commercial real estate.
What Are the Best Commercial Real Estate Investments in Lawrence KS?
Lawrence's college atmosphere creates unique investment opportunities for potential investors. Housing for students, including multi-family properties, apartment buildings, and purpose-built student accommodations are always in demand in a college town and present commercial real estate opportunities. Retail spaces near campus or in high-traffic areas can also yield strong returns, catering to the needs of students, faculty, and residents. Additionally — storage facilities and residential vehicle parks can provide high returns for commercial investors and may be valuable as Lawrence continues to grow.
With excellent opportunities and a robust rental market, commercial real estate may be a good investment in Lawrence, KS. If you're ready to explore the investment potential of this exciting market, contact Jackie Giroux today. Her in-depth knowledge of the local landscape and market can help you navigate the complexities of the real estate investment market and discover the perfect commercial properties to meet your investment goals.
