Storefront properties are those that have visibility from the street and are typically great investment properties given their low tenant turnover compared to office properties. Many storefront investment opportunities come in the form of outdated commercial or even residential properties located in downtown areas that can be improved or converted to lease for a steady income.
The key to a successful storefront, as with most real estate projects, is location, location, location. In particular, storefronts with a large window in commercial districts in large cities make for the best opportunities. One of the best way to find these locations is to seek out residential areas that are being rezoned for commercial and purchasing property or options ahead of the curve.
The first thing to remember when pursuing one of these opportunities is to make sure you comply with all local ordinances. Specifically, regulations regarding advertising, lighting and signs as well as more complicated matters like parking and driveways. Often times, regulations like these are overlooked and can end up breaking a deal as requesting any special permissions from the city can take months to get approved.
The second thing to remember is to have tenants lined up, ideally before purchasing the property. If this isn’t possible, it may be a good idea to either put an option on the property until you can find tenants or make the tenant search a condition of the offer to purchase (this option is free!). In the end, these leasing a storefront can be a great way to earn an income while building value in commercial real estate – the land appreciates very quickly while the tenants have very little turnover.