Tips on Investing in Industrial Real Estate

Tips on Investing in Industrial Real Estate
May 15, 2019 Edwin Deponte
In Post

As the years go by, industrial real estate is starting to gain some traction. Serious investors are beginning to look for industrial real estate properties to invest in for another source of income. A lot of companies that were production based are starting to shift to importation and distribution because labor costs are steadily rising. Due to the rise of import goods, storage spaces are in demand. So, a warehouse would be an excellent solution for storage problems. However, before investing in a warehouse, you should factor in the wants and needs of potential tenants. The features of your warehouse are crucial in getting tenants. Therefore, here are some tips on what tenants usually look at when browsing for a place to rent.

Location

The location of your industrial property is also crucial in getting tenants. Fuel prices are continually rising. It is beneficial to your tenants if your warehouse is situated near expressways or cargo docks for easier access. Another thing to consider is that there are states that have a low vacancy rate. So, if you know some for lease warehouse spaces in Kansas City, look into it, because they have a low vacancy rate which is 5%.

Height of the warehouse

The clear height, which is the height of the warehouse, is vital for tenants. Clear height means the distance between the floor and the clear ceiling, which means that there are no obstructions. The height of your warehouse of important because a higher clear height means more storage space. Typically, the clear height of warehouses is 30 to 32 feet.

Long term stability

In industrial real estate, leases typically last between three to five years, sometimes even ten years. This means that the turnover rate is very low which is good for the stability of your investment compared to commercial real estate wherein leases are typically only one to two years long. So, if you want a long term tenant, industrial real estate is for you.

Loading dock

Usually, loading docks are not really a requirement when you have a warehouse. But, it is better if you have one. Unloading can be done inside or outside the warehouse. This is to make transporting of your tenant’s goods easier. Goods or products can be transferred from the truck to the warehouse easily through loading docks.

Office space

In warehouses, usually, office space is required for office work. Typically, the office space needed in a warehouse is only five to ten percent of the whole warehouse space. This office space can be used by the manager and also as an employees lounge during their break times.

Conclusion

Industrial real estate is booming. So, do not be left behind. If you are really serious in investing a lot of money, get an industrial real estate property and rent it out to tenants. As the years go by, your property’s value will increase while getting paid rent by your tenants. This is just a simple guide to help you learn about what is needed in industrial real estate properties.

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