Franklin County Kansas Commercial Real Estate Market Trends Analysis

Industrial properties are commercial properties that are usually rented by Business to Business (B2B) companies. B2B companies either manufacture or distribute goods to other manufacturers or retailers.

The exception is the rapidly growing category of fulfillment centers that hold and distribute goods sold by online sales websites directly to their consumers.

Industrial property investors will hold the property long-term and serve as the landlord. Their investment budgets rely on income from both rent and the future sale of the property. Industrial leases can be based on either gross or net rent terms.

Annual and 10 Year Population Growth

Industrial real estate investors have requirements for correct population data that is particular to their kind of property investment. Sluggish or declining populations mean a decreasing tax base. Adequate tax receipts are required to maintain highways and infrastructure that industrial properties require.

A region that is losing its residents will experience poor commercial property appreciation as well as residential. The tenants for industrial properties need a consistent local workforce. These renters will not be comfortable gambling on a market that does not have a growing amount of acceptable workers.

Property Tax Rates

As we witnessed with multifamily investments, tax rates are an accurate clue to the financial health of a possible location. Inconsistent tax rates stop you from correctly assessing your predicted profits in that location.

Our articles on commercial property taxation and commercial property tax reduction methods will educate you on taxation basics.

Accessibility

The tenants in industrial properties produce or disburse high numbers of goods that are large. Tractor-trailer trucks are typically employed to do this. Industrial properties need to be close to highways so that large trucks can get to and from them without difficulty.

There are industrial companies that use trains or airplanes to haul their products. This makes being near an interstate, which usually runs near airports and train hubs, a big advantage for industrial assets.

Utilities

Production facilities frequently require high amounts of power and water. If a property doesn’t contain adequate levels of these utilities, some companies will look somewhere else.

Retail buildings lease units to companies whose customers are average residents in the region. These stores could be in a structure alone (single-tenant) or in a building with additional renters (multi-tenant). Retail businesses that want to be alone include banks, pharmacies, dining establishments, or automobile equipment centers.

A multi-tenant property can be as little as a few spaces, somewhat larger “neighborhood” or “strip” shopping centers, or larger shopping centers that are anchored by nationally known stores such as grocery stores. A large shopping center with a collection of types including office, retail, and residential are considered “lifestyle” shopping centers.

Retail leases are “net” with renters taking care of the landlord’s property tax, property insurance, and maintenance of common areas as additional rent. Renters are responsible for the upkeep of the facility as well.

A retail investor will utilize the identical demographic data that their target tenants utilize to find an acceptable investment asset.

Population Growth

The total data for the market under consideration isn’t sufficient for retail investors. Investors also look at the market’s submarkets. Retail locations have to be visible and accessible to their shoppers as they go about their daily activities.

Population growth is significant, but retailers require a minimum amount of clients at this time. Investors in retail assets will consider all facets of populace information such as population size, annual and 10 year growth numbers, and how many people work in the trade area.

Median Income

Wage standards show retailers where their shoppers are. Higher incomes reveal a suitable site for top end retailers, whereas middle incomes are suitable for middle income retailers including automobile equipment stores.

Median Age

The age of the market’s residents could be significant to retail tenants who use your property. If you want to find and keep quality tenants, you will want to buy a property that is located close to their target age categories.

Property Tax Rates

Retail property buyers utilize property tax rates the same way as both apartment complex and industrial investors. Rising taxes are charged to their renters which lowers their occupancy rates, and the worth of their asset could be lessened down the road.

Having your real estate overassessed by the tax assessor is an annoying issue leading even to further expenses. Protesting real estate taxes can be outsourced to the best commercial real estate lawyers in Franklin County KS.

Corporations lease premises for their employees in office buildings. Office buildings can be a one level flex space or a multi level building. For a lot of significant businesses, renting office space allows them to use their money for the development of their company.

Office renters sign a “full service” lease agreement which is additionally considered a gross lease. These kinds of lease agreements add the landlord’s costs, such as tax and insurance into the rent. You might find customized versions of gross lease agreements that are tailored to work that particular situation.

Office property investors own these assets for a long time which generates income from both repeating rental income and the appreciating worth of the property.

Population

Office space investors study demographic data that demonstrates the availability of acceptable workers for their targeted renters. They look for the complete population number, their ages, and their education. Successful office investors buy property in markets where their renters need to work.

Property Tax Rates

A well run city or county that attracts potential office employees to the area won’t have high or consistently rising tax rates. A qualified workforce pool attracts desirable office renters.

Incomes/Cost of Living

Higher wages could signal an educated population that a lot of office lessees need. It can additionally show the salary levels that employers will need to provide.

Education

Education levels are analyzed by office renters and investors to a greater degree than other property investors. A call center might not need college graduates, but a financial services tenant could.

BRRRR, which stands for “buy, rehab, rent, refinance, repeat”, is an investing plan to increase your portfolio by leveraging the improved worth of the asset. These are long-term or Buy and Hold investments. The investor receives rental revenue during their ownership and a one time amount when the asset’s value improves, after which they sell it.

After the property is purchased and renovated, it is rented to a tenant. As soon as they can, the investor obtains a “cash-out” refinance that lets them take funds out of the asset in cash. The investor uses this cash to obtain additional property which is rehabbed, leased, refinanced, etc.

Traditional commercial property loans aren’t an option for buy and repair investments. Traditional lending institutions prefer not to approve this type of projects because they are too risky.

Study our commercial real estate service provider directory to get in touch with the top commercial rehab lending companies in Franklin County Kansas and the top Franklin County commercial private and hard money lending companies.

From one of the best commercial real estate agents in Franklin County KS, you can get an expert opinion on the benefits and drawbacks of the city for your project. Let’s look at a selection of data a broker can advise you about.

Median Gross Rents

Investors need to realize how much rent they can collect and if it’s probable that rental rates will expand in the future. Rent levels are a vital component in an investor’s decisions.

Property Value Growth

Buy and hold investments obviously need properties that are supposed to appreciate in value.

Population

BRRRR investors will estimate the populace growth rate. Anemic residential markets that they need to bypass will show flatlined or shrinking rates.

Income

To purchase the right investment property, investors must be acquainted with their desired tenants’ level of income. You don’t need a Class A high-end multifamily complex in a market of mid or low level wages.

Property Tax Rates

Expanding taxes obviously cut into an investor’s profitability. Stable, reasonable taxes are an accurate indication that the market is a strong environment for investment.

Be advised that counties’ assessments of property values may be inaccurate, which makes investors pay unfair tax amounts unknowingly. The best Franklin County commercial real estate appraisal companies along with the best commercial property tax consulting companies in Franklin County KS are used by thrifty property owners to fix this.

People in the real estate business think of development as creating complete housing neighborhood projects or any kind of commercial real estate. A developer finds and buys acceptable property and prepares either parcels for purchase or buildings that are leased to tenants.

An investor must be certain the land is correctly zoned, engages civil engineers to plan the site work, hires architects and engineers to draw building plans, and controls the municipal approval process. When the okay is received, the property is developed, and the final product is advertised to the intended audience.

It could take one or two years from the beginning to completion of a development project. The economic picture or area laws can shift in a negative way before the venture is finished. This uncertainty makes real estate development the riskiest category of real estate business.

Unfriendly events sometimes force investors to put a construction process on hold. If the builders aren’t on the site, the site can get damaged. But you can use the best commercial landlord insurance companies in Franklin County KS to make sure that you have an appropriate compensation in such case.

Insurance ought to be included in developer’s project costs when showing it to a lender. Ask the best commercial construction lenders in Franklin County Kansas which local insurance firms they deem valid.

Population

Developers use populace size and growth pace along with economic and education data to make sure that there are enough retail shoppers and residential homebuyers in the area.

Income

The income amounts of the market’s citizens will dictate the kind of retail development that the market will support. Moderate incomes can still indicate a good market for blue collar shopping centers.

Office and industrial renters will need to see the pay rates that their potential workforce will require. Developers understand this, and utilize income rates to predict a location’s appeal for their desired renters.

Education

Businesses that occupy office and industrial properties hunt for contrasting educational factors in the area. High end businesses expect to discover more college degrees. Mid level companies are fine with high school grads.

Age

An aging citizenry that more frequently uses public services isn’t what developers are after. These are the labor pool that office and industrial renters have to have. Active workers and their households shop at businesses and dining establishments that rent retail buildings.

Expanding households turn into homebuyers serving the basis of a vibrant residential market.

Real estate loan note investors buy actual loans cheaper than the sum owed and become the new lender. The first lender could be agreeable to selling because they need capital, or because the borrower is not current with their loan payments.

The investor can re-amortize the loan with reduced payments giving them a long-term investment with interest income payments. The note purchaser is protected by the mortgage note that the borrower executed and can take back the property if need be.

Population

One of the most basic factors in real estate investing of all strategies is the magnitude of the market’s populace and if it’s growing. This is a fast “sniff test” of the financial strength of the locale.

Property Values

Property growth rates are vital to the mortgage note investment plan. The reliability of the collateral is the reliability of the investment.

Property Tax Rates

When property taxes rise regularly, borrowers who have trouble making their loan payments will find it hard to stay current. This is bad for long-term investors, but good for those who want to turn their investment around immediately through a liquidation of the collateral property.

An easy method of investing in the acquisition and oversight of real property is to buy shares in a REIT (Real Estate Investment Trust). Their revenue is derived from rental payments and the periodic liquidation of assets.

REITs are required to disburse 90% of their net revenue in dividends which is attractive to many investors. The capability to get their cash out by selling their REIT shares attracts modest investors.

People who buy shares in a REIT have no input in which assets are bought or how they are managed — they are passive investors.

Investors, who are no longer interested in active investing but need to stay in real estate, often buy REITs. When you liquidate real estate, you can use the money to invest in REIT shares.

There exists a wonderful legal procedure enabling you to postpone paying Capital Gains Tax on property sale in this situation. Take a look at our experts’ articles to understand how to take advantage of it: Can You Do a 1031 Exchange into a REIT? and A-to-Z Guide to Delaware Statutory Trust (DST) 1031 Exchange.

The law demands that you use assistance from a 1031 Exchange facilitator to deem the exchange legal. Our directory offers the best 1031 exchange companies in Franklin County KS to assist you in your search.

An additional investment choice that pools funds from individuals to invest in real estate is a real estate investment fund. These organizations don’t possess real property — they hold interest in companies that do, such as REITs.

This investment choice doesn’t disburse dividend revenue to their investors. Similarly to other stock funds, the profitability is generated by increases in the value of their stock.

The most common investment fund types are mutual funds, ETFs (exchange-traded funds), and private equity funds for high net worth investors. Shareholders are allowed to unload their shares if they need cash, similar to REITs.

As they are passive investors, fund shareholders are not part of any determinations including property acquisitions.