Over the last few years, a great deal of attention has been given to real estate investment opportunities, leisure properties being at the center of focus. If there is some prospect of something happening, there is a possibility that the leisure industry will drive economic development even in the post-pandemic era. While disposable incomes haven’t increased dramatically, expenditures have expanded, which translates into the fact that tourism and leisure are growing. It seems that people value time with friends and family, so there will be passenger flows between regions and countries. Enterprises, as well as industry organizations, take full advantage of the current situation to promote the development of the leisure industry.
It’s time for the movement you’ve been waiting for. Investing in commercial property is growing in popularity among those interested in substantial returns. The demand for short breaks has increased, not to mention that properties on the market have become more accessible owing to second home purchases and holiday homes, which have saturated the market in certain areas of the globe. After you do your homework and identify a suitable location boasting of potential customers, you can take the next big step. Investing in leisure property is an excellent choice, yet making the wrong decisions can be disastrous. These are the key factors you must take into consideration before purchasing a leisure property.
Calculate how much property you can afford
If you’re seriously thinking about acquiring leisure property, establish a budget. Commercial property tends to be expensive. However, the term “expensive” means different things to different people. If you’re a greenhorn – in other words, a first-time investor – you’ll undoubtedly think that leisure real estate is expensive. On the other hand, if you’re a successful investor, who profits from real estate, you won’t perceive the price as being too high. Just to be clear, leisure properties are more expensive than single-family residential homes. That is because it takes a lot of money to build and commercial square footage is more valuable.
Funding can be difficult to obtain provided you have other assets to secure the loan. To put it simply, it’s necessary to make a lump sum payment, generally in cash. Let’s not forget about fees, rates, utilities, insurance, repairs, and so on. If you don’t have enough funds in your bank account, you can invest in REITs, mortgage bonds, and mutual funds aimed at the real estate industry. Interestingly enough, casino REITs and their operators leverage the surge in online gambling. Video slots are now preferred by players and web-based gaming offers several benefits for REITs tenants, who have become involved in the online gaming ecosystem. Getting back on topic, if you choose a good time to buy leisure real estate, you’ll be able to invest in the local and national real estate market.
It’s important that you consider the location
You’re probably sick and tired of hearing this, but location is important. A leisure property in cities that have little room for expansion is more valuable as opposed to a leisure property found in a city with lots and lots of room for expansion. The explanation is self-evident. If you’re planning to open a restaurant or a café, you have to take into consideration aspects such as parking, visibility, and size. Equally, you should make sure nobody else is doing business in the neighborhood. Perhaps you have your mind set on opening a hotel with gaming facilities and interesting food outlets. In this case, analyze accessibility from different directions, streets, and intersections. People will come to backtest their slots strategy and see how it performs.
The factors that determine location suitability differ according to regions in a city. This basically means that the factors that are normally considered universally important when figuring out the importance of a location may not bear too much importance in some places as they do in others. The question now is: Where are you supposed to locate your premises? Well, the best locations have higher occupancy rates, sales per square footage, and, most importantly, profitability. The location is closely connected with the type of local development. In a residential area, for instance, you need to compete with residents for many spaces. It’s generally not recommended to be physically located near competitors, but there are instances when this move can help gain a competitive advantage.
Leisure properties come in many types and sizes
When selecting the best type of property, you might run into a wall. Undoubtedly, the leisure property category shows a great deal of variety. It’s worth keeping in mind that commercial property use classes can vary from country to country and have been amended over time. Therefore, it’s crucial to check the regulations concerning the building type prior to doing anything. That being said, these are the main commercial leisure property types:
- Restaurants & cafes – Restaurants and cafes start to turn a profit within 3 to 5 years. The average profit margin has fallen, but that doesn’t mean that you can’t make a lot of money. One type of restaurant to consider is delivery-exclusive restaurants. In spite of the shutdowns and setbacks, you can meet customer demand.
- Hot food takeaways – Hot food takeaways, especially those in close proximity to residential areas, provide convenience and value. Just so you know, strict local authority planning conditions apply.
- Hotels and tourism – Working from home has resulted in more disposable income in the hands of young professionals looking to take trips within variable distances. COVID-19 vaccinations bring new hope for the leisure industry, so there will be a gradual return to normalcy.
- Entertainment - Properties like cinemas, music venues, golf courses, and casinos are prime examples of leisure-based entertainment properties. Let’s focus our attention on casinos for a little bit. Indeed, players are seeking to find the most trusted online casinos, but they haven’t given up on physical casinos. Owing to their unique nature, casinos are worth taking into account.
- Drinking establishments – Drinking establishments are common, but they aren’t new. They tend to have low startup costs and the profit margins are high, especially when it comes down to alcohol.
- Camping - Have you ever heard of glamping? It’s a new concept that describes a style of camping with amenities and resort-style services. It’s big business considering that many travelers have taken a glamping trip over the past couple of years.
- Health & fitness – People have become more aware of the importance of working out and eating right. Opening a gym is a good idea, yet you can equally invest in a sports property like a football field.
Things can change along the way, so you must pay attention.