Your Guide to Smart Industrial Real Estate Investing
Dive into the world of industrial real estate investing with our comprehensive guide. Discover tips on buying, building, and financing industrial properties, and stay ahead with the latest market trends.
Industrial properties like warehouses and manufacturing facilities are vastly different from buying a house or an office building. They're unique — they're bigger, often more complex, and have different rules of the game.
Not to worry, I'm here to get you started. Whether you're looking to buy or build from scratch, there's a lot to get excited about in this space.
Why Industrial Properties are a Hot Pick
Why are investors rushing towards industrial properties? Simple — they're in high demand, thanks to the massive growth of online shopping.
Warehouses and distribution centers are the backbone of e-commerce, and they need space — lots of it. This demand makes industrial properties a solid bet for good returns. Plus, they're generally less hassle to maintain than other types of properties.
Tips for Buying Industrial Real Estate
So, ready to buy an industrial property?
You've no doubt heard that location is king. And it is, but you have to use a different lens than for a multifamily or office property.
You want easy access for trucks and near major roads or cities. Size matters too, but it's not just about square footage. Think about ceiling heights, truck courts, loading docks, and the building's overall layout. And always do your homework — check the property's condition, history, and potential for future growth.
Building from the Ground Up
Want to build an industrial property yourself? Don't let the box-like exterior of most industrial assets fool you — it's an adventure!
Start by finding the perfect spot and getting all the necessary permits. When designing, think about what will make your property stand out. Energy efficiency, modern security — these are things that tenants love. Picking the right team to build your vision is crucial. And remember, good planning keeps you on budget and on time.
Financing Your Industrial Property Dream
Thinking about how to finance your industrial property? It's not as intimidating as it sounds. There are a few paths you can take, like bank loans or even life company loans. Each has its pros and cons, but what's important is what works for you.
Need money to build? Construction loans might be your go-to. Just remember, lenders love details — the more you have, the better your chances.
One thing, though. It may be easy to envision the ideal loan to make your industrial investment happen, but you've got to do more than envision it. And with the industrial property sector, even odds your bank or credit union down the road won't even consider financing your play — and if they do, the chances of landing best-in-class financing terms are almost nil.
That means more expensive financing costs, which translate into lower investment returns. But don't sweat it: Our platform at Janover puts your deal in front of more than 10% of the banks in America. Not to mention more than one-third of the largest 100 credit unions and a thousand other lenders.
With the right loan at the best terms, a profitable investment becomes much less of a hassle. (You can grab a free quote from us at the form below.)
Navigating Risks in Industrial Investing
Investing always comes with risks, right? In industrial real estate, it's about staying smart. Market trends can shift, so keep an eye on the big picture. Be aware of environmental regulations and potential site contamination — these can be big headaches if ignored.
Think long-term and be ready to adapt to changes. Pay attention to the news, to market trends, and to what's coming up next for the sector. That's how you stay ahead.
Keeping Up with Market Trends
E-commerce is booming, and that's good news for industrial properties. We're seeing more high-tech warehouses and smart logistics centers. It's exciting stuff, and it's shaping where the market is heading. Stay curious, keep learning, and you'll spot opportunities others might miss.
Wrapping Things Up
Industrial real estate investing is a journey with plenty of rewards for those who do their homework and stay flexible. Whether it's buying, building, or just exploring, there's a lot to gain in this exciting field.
My advice for your next step: Do some market research. Check out some industrial market reports from the big brokerages. Read some trend pieces on industrial investments and design. Learn what tenants are after, and then apply that knowledge to where you want to invest.
Still not confident? There's always the option to invest in an industrial property syndication — you'll get your feet wet, hopefully earn some nice returns, and be able to learn from the sidelines.