When you think of real estate investments, what comes to mind? The ability to generate passive income streams and substantial returns emerges. So, there might be a chance to support a cause you’re passionate about, such as increasing accessibility to affordable housing. Real estate investments aren’t just an opportunity to build individual wealth. Particular investments are also opportunities to add value to communities by revitalizing or rebuilding them.
Specific types of commercial real estate investments offer these chances. Despite popular perception, commercial properties aren’t limited to office buildings, shopping malls, and storage centers. Investments, such as mobile home parks, mixed-use developments, and adaptive reuse projects, are prime examples of ways to enhance the value of communities. Let’s take a look at each property class in more detail.
1. Mobile Home Parks
You might be surprised to learn that top investors, such as Warren Buffett, don’t solely rely on the stock market to build wealth. Like others, they recognize that alternative investments with steady cash flows can be more reliable. Specifically, overlooked real estate investment classes with low supply and high demand can generate long-term wealth.
In other words, slow and steady can win the race over investments with short-term gains. The stock market can become volatile, subject to speculation. Alternative investments, on the other hand, may not succumb to collective uncertainty. Although real estate markets fluctuate, overlooked asset classes can often represent hidden gems.
In terms of affordable housing and mobile home parks, Lifestyle Investing expert Justin Donald says, “There is a high demand for affordable housing, and mobile homes can provide the solution. Furthermore, zoning restrictions and local policies limit the development of new mobile home parks, increasing the value of existing ones.”
This just goes to show how mobile home communities can provide a solution to the affordable housing crisis, as the cost of these properties – and their maintenance – is typically less than that of traditional-style homes.
By purchasing mobile home communities, investors keep affordable housing options accessible. Fixing up or upgrading existing parks also helps make these communities more desirable, safe, and comparable to conventional housing developments. You’re not just investing in your future; you’re also helping others achieve their desired lifestyles.
2. Mixed-Use Developments
A mixed-use development is recognizable by its combination of business, recreational, and residential properties. Chances are you’ve passed by several of them without realizing it. Perhaps your home is in one. A big clue is if there’s a small shopping center along with a park or playground area next to your community’s homes.
However, mixed-use developments also typically include a variety of residential properties. You might have single-family homes with larger lots interspersed among patio homes and apartments. Furthermore, there might be several HOAs overseeing different sections of the larger community. For instance, one HOA manages the condos while another is in charge of the single-family residences.
Mixed-use developments make it more convenient for residents to access a range of goods and services, including medical care. These businesses are usually within walking distance, but the organizations also bring foot traffic to the area. The economic activity supports local jobs, growth, and social interactions. Services, including recreational facilities, ensure residents can enjoy a higher quality of life nearby. They don’t have to endure the burden of travel for access.
A mixed-use development also diversifies the income streams for investors. You may be collecting rent from commercial leases in addition to the residential properties. If the development has a community park or arena, you could generate additional revenue from usage fees. Having amenities and much-needed services nearby boosts property values for all, including the homeowners. Mixed-use developments help grow collective wealth while attracting new businesses and activities.
3. Adaptive Reuse Projects
Adaptive reuse projects involve repurposing abandoned buildings and land. As an investor, you may decide to purchase a building that was once a shoe factory. You convert it into a part office building, part residence with loft-style apartments. Another example is purchasing a historic building and upgrading its interior to accommodate commercial tenants who can establish local offices.
Sometimes, reuse projects can become hubs for specific types of organizations concentrated in a single industry. For instance, repurposed office spaces could attract medical providers or tech companies. The once-abandoned building could be transformed into a much-needed co-working space for hybrid and remote employees. Perhaps the community needs an upgraded facility for essential services, such as the police force.
An investor willing to re-design a vacated building is adding value to the community by ensuring essential services can meet community demand. Adaptive reuse projects stimulate the local economy through job creation and economic growth. The design and upgrade process means investors must hire contractors and design professionals. Other companies, such as ISPs and suppliers, will also need to lend their expertise.
Additionally, revitalizing abandoned properties removes the stigma from the local area. People don’t see signs of decline. Instead, they see bustling activity and can benefit from the amenities the repurposed space will now provide. The project can expand housing options if portions of the building are converted to residences.
Whether the issues include proximity to college campuses or homes for specific populations, such as seniors, added housing encourages residents to stay. Besides preventing population loss, adaptive reuse projects save communities money on construction costs. City governments and taxpayers aren’t entirely responsible for demolishing deteriorating buildings. Sometimes, the expense of demolishing a structure and rebuilding it in its place is more than the cost of revitalizing it.
Adding Value to Communities Through Commercial Real Estate
As an investor, you decide where to put your money and time. Having a diversified portfolio that generates acceptable returns is usually the main objective you’re aiming for. Yet, stocks and bonds may not provide the level of long-term gains you seek. You probably also have goals beyond adding to your bottom line.
Boosting the value of communities you’re connected to or invested in brings additional benefits, including purposes you’re strongly attracted to. Commercial real estate investments, including mobile home parks, can support passions like increasing the availability of affordable housing. Before securing your next investment, consider the long-term benefits you can create for the communities you care about.
