Joe Fairless is a co-founder of Ashcroft Capital, a wildly successful real estate company that manages over $2.5 billion in assets. He explains why commercial real estate investors should consider the many advantages of purchasing commercial warehouses and offers insight into how to pick the best possible spots.
Joe Fairless points out that the number of online shoppers has been rising steadily for the last few years. However, the COVID-19 lockdowns significantly boosted online retailers while at the same time putting many brick-and-mortar stores out of business. For this reason, the demand for warehouse space has risen exponentially, enabling investors in this field to turn good profits. An investor can rent out the unit to a single company or rent it out to various small establishments to diversify income sources. In some instances, tenants can use the space for order fulfillment, manufacturing purposes, or even as a retail outlet.
Even so, high demand isn’t the only reason to invest in warehouse space, Joe Fairless points out. Maintenance is minimal compared to commercial and residential real estate investments, as an owner will only need to focus on roofing, structural stability, and security. Tenants are guaranteed to take good care of the space as the success of their business depends on it. In the worst-case scenario, if demand for warehouse space drops, the area can be converted into a club or warehouse. There is also the fact that warehouse space can offer some great state and federal tax benefits. These include capital allowance, deductions on advertising, property management fees, mortgage, tax, insurance, and depreciation.
At the same time, Joe Fairless is quick to point out that purchasing warehouse space is costly compared to other commercial and residential real estate options. Fairless explains that the secret of his company’s success is careful research of potential markets to ensure each location has a high current and future profit potential. Investors will also want to partner with a good agent, contractors, and even legal experts before making a purchase to ensure no unforeseen problems could affect revenue generation. Fairless also recommends that investors get to know the industries and firms that would most likely lease rental space in any given area to choose properties that would meet potential tenant needs.
Joe Fairless partners with over three thousand investors and has long encouraged those who want to earn good returns on their investments to consider the many benefits of purchasing good commercial real estate options. Warehouse real estate is a particularly ideal option, he notes, as demand is high and will likely remain so for the foreseeable future. There are also great tax benefits, minimal costs, and minimal work and maintenance as tenants are motivated to keep the site in good repair and are likely to stay long-term. Versatility is yet another benefit, as the space can be converted if the need arises at a later date. Those who are willing to make the investment will likely find that it is well worth the time and effort.