When you’re looking for places to buy commercial property, you probably look for areas that are relatively busy or have plenty of foot traffic. After all, you can ask for higher rent when your tenants will generate higher profits.
As you look for profitable properties, have you considered focusing on locations known for being eco-friendly? If not, it’s worth considering. Properties in eco-friendly areas have massive potential for profitability.
Finding these locations isn’t hard. With some research, you can find cities with a green focus and invest in property there. You may even already own property in an eco-friendly area without realizing it.
If you already own properties, you can use location intelligence to see who is frequenting the locations, and other places they visit. You may notice a trend that suggests eco-friendly people already make up a portion of customers. If so, check to see that you’re charging enough for rent compared to other landlords.
For anyone who hasn’t sought commercial property in an eco-friendly area, here are several reasons to target this type of community.
1. You’ll have fewer vacancies
People flock to green cities, which means you’ll likely have fewer vacancies. At least your vacancies won’t be caused by a lifeless city. Naturally, some businesses will do better than others, but many existing, successful businesses can’t wait to open a location in a green town.
Green cities are ideal locations for many businesses since a lot of people want to live in a community that takes preserving the environment seriously. For instance, there are only a few places in the world where the city recycles styrofoam or other materials that aren’t otherwise recycled.
Some cities, like Santa Cruz, CA, are known for being eco-friendlier than other areas for various reasons. For instance, there’s a strong focus on supporting local businesses, recycling, and renewable energy.
There are many reasons people want to live in green cities, and it’s not just for the opportunity to recycle obscure materials. Some people want the convenience of clean public transportation, and others want to be in an area where commercial businesses prioritize the environment.
For example,Viikki is a green district located in Helsinki, Finland. It’s one of the only cities in the world where you’ll find an abundance of certified eco-friendly hotels and wind energy systems. This city is also home to the first apartment building in Finland to run on solar electricity.
2. You can charge a premium for rent
As eco-friendly cities become more popular, local businesses tend to do better financially, which means you can charge a premium for rent in these areas. Just like rents are higher in big tech cities like Seattle and San Francisco, you’ll also see higher rents in any other in-demand location.
Once you locate an eco-friendly area, find out what the going rate is for rent in the area. Look around at other commercial buildings for rent to get an idea of what you can charge.
Of course, you’ll still need to calculate all the details to make sure a property will be adequately profitable.
3. You can rent to niche/tourist businesses
There are plenty of niche businesses out there that only do well in certain environments. Sometimes they happen to be businesses that sell mostly to tourists. For instance, in hippie-type beach towns, you’ll find a lot of hand-crafted gifts made from blown glass, yarn, hemp, and beads. You’ll also find plenty of unique restaurants and clothing stores that sell items with funny sayings. These also happen to be the cities that focus on preserving the environment.
Renting to these niche businesses, especially in a tourist town, can be extremely profitable. Many of these businesses wouldn’t be successful anywhere else, and if you have a property for rent in the busy downtown area, they’ll want your space.
Expand your portfolio with property in a green town
Next time you decide to add more properties to your commercial portfolio, consider acquiring property in an eco-friendly area. Your space will appeal to niche businesses, and you’ll be able to charge a premium for rent in many cases.
Article Submitted By Community Writer
