When it comes to Oklahoma real estate, you have many options for investment, such as residential and industrial Oklahoma properties. Before you begin searching for “industrial building for sale near me,” “residential properties Oklahoma,” or “industrial buildings in Oklahoma,” Make sure that you know which one you want.
What Are Industrial Oklahoma Properties?
Industrial buildings in Oklahoma are dedicated to production, manufacturing, assembly, warehousing, research, storage, and distribution. These buildings, however, will have differences when it comes to class.
New, well-designed buildings fall under class A. They have comfortable amenities and quality materials, attracting high-end renters. The benefit to investing in a Class A property is its low-risk thanks to low vacancy rates and higher rent. On the other hand, they cost more than other classes and have a low CAP rate.
New construction that only includes the basics or older, well-maintained properties fall under Class B. The risk is a little higher with less desirable properties. Still, there is always the opportunity to add value to the property and improve its class and value. A Class B can be perfect for someone who wants a chance to enhance the value of their investment.
A building that is 20 years old or older will probably fall under Class C. These properties are typically in need of repairs with low rent and higher vacancies. If you put in the effort, however, it is possible to increase the value of your property.
What Are Residential Properties?
Unlike industrial Oklahoma properties, residential real estate includes single-family homes and one-unit to four-unit residential properties. So, a duplex would fall under residential real estate while a small apartment would not. Many people begin their journey in real estate by investing in residential real estate and moving on to commercial real estate.
Pros and Cons
- Lower cost of entry
- Stability in a weak economy
- Low tenant turnover
- A large pool of potential tenants
- Simple zoning laws
- More challenging to increase the value
- Difficulty finding quality tenants
- Lower rates of return
- Responsible for property taxes and expenses
- Longer leases (5-10 years, rather than 12 months)
- Tenant responsible for expenses with triple-net leases
- High returns on the investment
- Easily find qualified tenants
- Possible to increase value quickly
- Higher cost of entry
- Less stable in a weak economy
- Complex and changing zoning laws
- Smaller tenant pool
Each type of property has its pros and cons. An experienced broker can help you navigate your budget and level of risk to find the best option. While there is a slightly higher risk when investing in industrial properties, you also have a better chance of increasing their value. Unlike residential properties, the cash flow, not comparables, determines value.
If you find that you are interested in an “industrial building for sale near me” or any other commercial property, please contact the team at Horizon Commercial Real Estate. We are happy to answer your questions and help you find the ideal investment.