Investing for Income with Shopping Centers

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Investing for Income with Shopping Centers

There are some larger commercial real estate investors who seek cash flow and diversification by investing for income with shopping centers. These types of investments can offer regular incoming cash flow. In addition, the property can also appreciate independently of the stock market, which can allow these investors to profit, regardless of market conditions.

Investing for Income with Shopping CentersIn the United States, it is supermarkets that anchor nearly one-half of shopping centers – with approximately one-third of the major shopping centers having drug or other convenience stores as their anchor.

Many of these types of commercial properties will use between three and fifteen acres of land on which to place their stores, with the large anchor stores taking up between 30 to 50 percent of the total space.

Factors to Consider When Purchasing a Shopping Center

When considering the purchase of a shopping center, there are several criteria to consider. One of the primary considerations is the property’s location. This is because the location will not only bring in tenants, but also customers to those tenants’ businesses. When seeking a good location, one of the key things to look for is high visibility, as well as easy access from frontage roads.

In addition, the center should also provide ample parking – ideally at no cost to the customers. And, it should offer a nice diversity in terms of the different businesses that are located within the immediate vicinity. This way, customers may even consider the shopping center as a one-stop center that can meet most or all of their needs.

Financing the Purchase of a Shopping Center

When financing the purchase of a commercial shopping center, investors are typically required to provide at least 20 to 25 percent down at closing. This, however, can quickly be offset due to the higher amount of monthly incoming cash flow from the rental income.

Managing Income Properties

When you own an income property – regardless of how large or how small – the day to day maintenance can become cumbersome. That is why it is nice to hand over those duties to a property manager.

A competent property manager will do much more than just collect the rent from tenants. Duties can also include property maintenance, rent negotiation, and even tenant disputes. For more information on how you can benefit from your investment without all the work, contact us.

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