Real estate is one of the best forms of investment for your money, but the question for those who are new to real estate investing is where to put your money. There are two main areas that most investors put their money: residential and commercial real estate. Both have their pros and cons, but in the area of commercial real estate investing, there is an often overlooked opportunity that you should consider: warehouses. The following are a few reasons to consider this area of investment.
Local e-commerce businesses
The internet has changed our economy. Today, there are local businesses that have customers all over the nation and even worldwide. They may sell a popular product that is only available by ordering online, but all of their inventory is stored in a local location. They take orders online and then pull the sold inventory from their warehouse and process the orders. The processing of the orders can often be done in an area of the warehouse, so there is no need for a separate facility for this. The entire process is similar to what the mail order business used to be but on a much larger scale.
Nationwide e-commerce businesses
Some businesses are so large that they have outgrown the benefits of a single warehouse location. They have a need for warehouses that are located in strategic areas all across the country. These warehouses have the same inventory in each location. The reason for this is that the competition for e-commerce customers has become so intense that delivery times are now an issue. People ordering products on the internet expect them to arrive quickly. They may be willing to wait for a unique item that is only available from one company, but for general merchandise, they want it fast. For this reason, large companies are setting up warehouses across the nation. Local inventory locations means local delivery, and this is fast and cheaper than shipping everything with priority delivery.
They are less expensive to own
There are many expenses related to the maintenance of commercial property with buildings such as retail strip malls or an office complex. These expenses are similar to those of residential properties. But with warehouses, the buildings are far simpler; therefore, they are easier to maintain. In addition, due to the nature of businesses' need for warehouses, the leases are generally longer. This provides more stability for your investment.
The demand for warehouse space is something that has become a structural aspect of the economy. It is not a fad. If you are looking for a commercial real estate investment, you should consider warehouses. They are not glamorous, but they are both a good and stable long-term investment.