Are you planning to diversify your investment portfolio with a mixed-use or commercial property located in California, but are hesitant to do so given the turbulent economy and unpredictable real estate market conditions?
Let’s start with the good news: California commercial and mixed-use properties are still viable investment options with tons of potential upside and will continue to be sustainable revenue-generating assets for the foreseeable future. Why, you may ask? The team at Security Financial Services have compiled the following overview of some of the key benefits of mixed-use and commercial properties from an investor’s perspective to help you decide if you should add them to your investment strategy.
The Mixed-Use Concept
Mixed-use properties offer space for both residential and commercial tenants. A typical set-up is office or retail spaces on the first floor with residential spaces situated above. Urban planners are increasingly incorporating mixed-use properties into new development projects to maximize utility and efficiency—creating value for all parties involved and resulting in a close-knit, communal vibe.
Here are some of the top advantages of mixed-use properties that make them the ideal investment asset:
· Sustainability & Economic Enhancement: Mixed-use properties enhance local economies by facilitating more foot traffic to businesses. These properties perform well in areas with accessible public transportation, as residents and workers can simply walk from their home to their occupation. Walkability is a huge factor when it comes to drawing potential tenants for investors, and the mixed-use concept certainly boosts this aspect. As an added bonus, mixed-use initiatives commonly repurpose dilapidated older structures, a greener sustainable alternative than building from the ground-up.
· Optimal Return on Investment: Mixed-use properties generate more favorable return on investment (ROI) compared to other property categories. An investment in a mixed-used building is inherently diversified—split between commercial and residential tenants. This lessens the risk profile of the asset as there are several tenants as opposed to a single one, meaning that even if there is a vacancy, the property still generates a profit. Having multiple tenants also translates into a higher overall income and lengthier leases. More money and less hassle finding new tenants every year? Sounds like a win-win to us!
· Increased Demand & Efficiency: The reduced dependence on having a vehicle in neighborhoods with mixed-use buildings promotes interaction between residents. The shared spaces facilitate social mingling among residents, workers and customers. This produces a community-centric feel that is appealing to new tenants and businesses looking for a new space to do business or reside. What’s more, commercial tenants from complementary industries can form mutually-beneficial relationships in which they drive customers to one another—think like a gym being co-located with a supplement store. Successful, satisfied tenants equals less turnover and stress for property owner investors.
Start Your Investment Journey Today!
Founded in 1943, Security Financial Services (SFS) is an established real estate lender headquartered in San Francisco. Throughout both good times and bad, we’ve provided mortgage brokers, developers, and investors acquisition, rehab, or refi loans secured by property throughout the Bay Area and Northern California. We offer the most competitive pricing and terms for private money loans in Norther California with the added ability to close in a fraction of the time it takes for conventional lenders. Because we are a direct lender, we handle the entire underwriting and servicing processes entirely in-house. The result? Uncompromised service to our clients. Ready to experience the SFS difference? Contact us today to learn more about how we can assist you in realizing your investment goals!