Benefits of warehouse commercial real estate investments

benefits of warehouse commercial real estate investments

For a long time, we’ve all known that real estate investing has been a favored passive income approach. Investing in warehouses is a type of commercial real estate that is one of the finest methods to make money. Also, it is the safest way too. Although some people prefer to invest in residential real estate rather than warehouses because of the risks involved in warehouse investment. However, warehouse real estate has other advantages which can provide much better returns than residential real estate. Hence, let’s explore the benefits of warehouse commercial real estate investments through this blog. 

Benefits of Warehouse commercial real estate

Warehouse investments come with a number of benefits. It helps real estate investors with improving productivity, lowering costs, and making inventory management easier. Let’s have a detailed look at the benefits of warehouse commercial real estate investment. 

1. Storage: 

Your office space may have limited storage capacity. Therefore, you can pile up the surplus goods in the warehouse space. Thus it frees up the vital space for essential products which are in demand. 

2. High level of flexibility: 

Investing in warehouse opportunities does not always mean storage purposes. Investors can convert the extra warehouse space into offices, club space, restaurants, fulfillment centers, and retail spaces also. It is very flexible and can be converted into any type of commercial or industrial space as per the requirement. However, if your warehouse team grows or the inventory increases you can build walls in the existing property. Hence, you add more space as per your needs.

3. Trouble-free handling: 

Holding your stock in warehouse facilities keeps them safe and secured. Nowadays warehouses are big and plain buildings with loading docks and automated forklifts. As a result, shipping of the products, managing the inventory is a lot smoother in this type of investment. 

4. Source of passive income: 

Warehouse investing is usually a long-term investments plan. These property types generate a passive income monthly once the property is leased up with the tenants. Furthermore, the monthly maintenance and management are excluded from the income. The increased demand for warehouse investment is due to its long-term rewards and profits. This factor ensures the benefits of warehouse commercial real estate.

5. Ensures continuous supply:  

The storage facilities ensure a continuous supply. There are some commodities such as agricultural products which are produced at a certain period of the year. But consumed throughout the year. Therefore, with warehouse facilities, you can supply such products whole year without any break. 

6. Financial benefits: 

Investment in industrial real estate is tending towards warehousing. As warehousing helps to reduce costs in various ways. Such as, an investor can borrow money against the security of warehouse stocks. Also, some warehouses will allow you to pay customs duty on goods, keeping the costs under control. 

7. Tax benefits: 

Many investors choose warehouse investing over residential real estate due to its tax benefits. The owner can take the benefits at both local and federal levels. If the owner faces the risk of receiving less price during selling then he can rent the warehouse. Moreover, on a part-time basis. Term leases are longer in this type of real estate investing than other commercial investments. It’s a long-term investment that pays dividends. 

8. Triple net leases: 

Usage of triple net leases with the warehousing investment is advantageous. As per the industrial REITs, the tenants are absorbing some amount of maintenance expenses, insurances cost, and taxes. By spreading those expenses you have to spend lesser amounts of the ongoing costs. 

9. Competitive in nature: 

When it comes to investment or making any industrial asset people are tending towards warehouse investments. These can do profit in a large amount and make huge benefits in the entire housing sector. Industrial warehousing is creating new competition in the commercial real estate market. 

Bottomline

The rapid decline in retail spaces for the pandemic has forced many real estate investors to move their focus to warehouses. The job alert among the retailers has forced them to move their business online. Thus the increased demand for warehouse opportunities ramps up. But before making any large warehouse investment decision, due diligence and research are a must. And in any kind of assistance Lilypad’s experienced team is there with you to make a profitable investment decision.