Mixed Use Properties – A Good Investment?


Mixed-Use Properties - A Good Investment?

If you’re considering your options when it comes to investments, don’t overlook mixed-use developments. When managed correctly, these properties can provide a greater income and sense of security than other investment properties. Right now, they’re becoming a lot more desirable to landlords, with a wide range of tenants looking to be close to local amenities. Let's take a closer look at Mixed-Use as a property type and the benefits you can expect from them.

What is a Mixed-Use Property?

When properties are made up of two or more different types of real estate that can be used for different purposes, they’re described as mixed-use. An example of this is a building that’s utilized as both an office space and residential units. The term can also refer to properties such as retail stores or restaurants with apartments above them as well.

What are the Benefits of Owning a Mixed-Use Property?

There are a number of advantages to investing in a mixed use property, such as:

Lease Diversification
They’re a reduced investment risk, as different property uses can provide multiple income streams which can offer a little protection during difficult economic times.

Low Vacancy Rates
Mixed-use properties are currently in high demand with both commercial and residential tenants as they are often located in heavily populated areas that are close to local amenities. This often eases tenant acquisition and retention.

High Rental Value
When a mixed-use investment property is located in popular areas, investors can rent at higher rates.

Multiple Income Streams
When you own developments within a mixed-use property (for example an apartment and a coffee shop), you can expect revenue from two different sources. When demand fluctuates, you can always count on one income stream to supplement the other.

Investors can Potentially Switch Property Usage Down the Line
This is true for those wishing to turn commercial units into full residential properties. You will need to check with the local municipality if zoning regulations allow you to do this.

They can Reduce Costs
With a mixed-use building, it’s often the case that utilities and other bills can be managed with one service, meaningless administrative functions, and potential costs to landlords.

Overall, investing in mixed use properties is a great way to generate a stable ongoing income which can add both value and diversity to local communities as well as the investor’s portfolio. While they can also present a unique set of challenges, landlords can expect a high yield from these properties with the correct preparation.