Making More Money Off A Mixed Use Investment Property
Investment properties are a great way to generate income. Residential properties, such as homes or condos, can produce steady income as long as there are people willing to rent the space. Commercial properties, such as restaurants and stores, can also produce plenty of income from the owner. Many investors choose to create income from both types of properties. There's also something called mixed use properties, which are properties that have both residential and commercial uses. Here are three tips for making the most out of a mixed use investment property.
Add A Laundromat
Since mixed use investment properties have both businesses and residential units in the same building, the choice of business is very important. Putting the wrong business in the building can actually keep renters away while the right business can attract them. One business that goes hand in hand with residential units is a laundromat. Renters are usually the biggest customer base for laundromats. Mixed use buildings are also often found in densely populated areas. These areas are where laundromats are used the most. The main drawback of opening a laundromat is the high startup cost. While the owner of the building will not need to worry about paying rent, landromat equipment can be pricey. It can cost between $150,000 and $400,000 to stock the laundromat with machines. Card reader systems, which are necessary in today's world, typically run between $40,000 and $80,000. For more information, contact Metropolitan Laundry Machinery Sales Inc. or a similar company.
Another option for mixed use buildings is to rent out the commercial space as offices. There are many advantages to this. The main advantage is that the rents can be a steady source of income for the building owner. It can also be good for the residential tenants. Since many businesses operate on a 9 to 5 schedule, issues such as too much noise at night won't be a problem. It's also likely that having businesses offices in the same building will encourage some of the employees to consider renting a residence in the same place.
Adding stores and restaurants can also be a good idea since potential customers are already inside the building. However, it's important to think this through. While stores and restaurants can be very successful in mixed use buildings, they can also lead to losses. Restaurants are more successful in areas with either high foot traffic or ample parking. If the mixed use building in question has neither, then a restaurant may not be the right business. Restaurants also create a lot of noise and can waft food smells throughout the area. Making sure that the building is able to insulate the residents from the noise and the smell is imperative.
Mixed use investment properties are a great way to make money from both a commercial and a residential standpoint. Investors in these buildings should consider laundromats, offices, and even restaurants when determining how to make money off the commercial side of the property.