When you’re ready to make a new investment, it can feel like you’re staring down a dozen different choices, but there are only two that really matter. Retail and office spaces are some of the best investments you can make, allowing you to secure a future of good money and awesome, reliable tenants, but how do you pick between the two?

These are the pros and cons of these two amazing options and what they offer each investor!

The Pros and Cons of Investing in Retail vs. Office SpacesOffice Spaces Have Less Turnover

One of the most important things to consider when you’re setting up an investment is how much work is going to go into it over the years. Unfortunately, if you don’t have a steady tenant, you could be putting in tons of work just to find, move in, and settle a new tenant every year or two. 

Office space tenants tend to have a lower turnover and are more likely to stay in a location for as long as possible to avoid moving and the cost of finding a different office space. This is a great perk.

Retail Office Spaces Can Introduce Future Tenants

If you don’t mind the high turnover, a great perk of retail tenants is that you’re constantly advertising your building to the hundreds of people who walk in every day. This means that the moment your tenant is out, there’s likely to be someone who has seen your building and location and could be interested in renting from you next!

Office Spaces Offer Dependable Income

With an established business that simply needs a larger office, you often have a more reliable tenant with a steadier stream of income than you do from a new retail tenant who’s starting from scratch.

Although it’s vital that you vet everyone carefully to make sure they’ll be able to pay the rent from month to month, you’ll lose less sleep over an office space tenant.

Retail Gives You a Location to Eventually Start a Business

Everyone has a business idea in their mind that they eventually would love to bring to life. This could mean that if you own a retail space that you rent out, you could subsequently use this for a business of your own. 

Owning the land while it’s rented out gives you the chance to watch how other businesses do and ensure that your company can thrive in this location.

Both Spaces Ensure Your Tenant is Making Money

The best thing about both of these types of locations is that you can be sure your tenant is making money and has some form of income. With residential buildings, you can only hope that your tenant keeps their job and flow of income and doesn’t just end up squatting in the property.

There’s more predictability through business renting, which is a far safer investment.  You can help tenants envision their future offices by staging. Research how much glass office partitions cost and factor that into your remodel before listing the office space or retail space for rent.

Both Spaces Rely on the Local Economy

Unfortunately, the other side of the coin is that your tenants rely entirely on the economy if they’re a business of some sort. If the economy takes a nosedive and your tenant is currently an artisan bee spoon weaver, you might have trouble getting rent out of them for the next few months.

It’s a good idea to create backup savings for yourself so that you can afford some rough waters when they’re heading your way.

Business-Based Spaces Offer Easier Maintenance

Retail spaces are nice, but they’re going to need far more maintenance and are far less predictable. You can trust that employees will be careful and won’t crack the new commercial glass railing systems you installed, but retail customers are another story. 

An office has people who want to respect their surroundings and avoid getting fired or in trouble. This is the ideal type of business to rent to. 

Clearing Out Between Tenants is A Major Operation

Regardless of which you go with, it’s important to know that cleaning up between clients, staging, and keeping up with what businesses are on the rise is all part of the job. Your tenants want to rent a space with tons of chances for customers to get intrigued and want to stop in and browse. Help them create a space like that by investing in land and a building that pulls buyers to the door and allows your tenants to seal the deal.

Adding visual intrigue and art, like acoustic panel art, which also muffles noise, can be the best choice you make for any office space.

Your Choice Can Make a Massive Difference

Every investment is a gamble, but it’s vital for you to stop and plan ahead regardless.  Consider these pros and cons, and you’ll figure out which investment is best for your needs!

Author Bio:

Sam Willis is a freelance writer that loves sharing his knowledge and expertise in residential and commercial real estate, as well as engineering and construction. He lives in Atlanta, Georgia where he enjoys spending time with his wife and researching real estate trends in his free time. Sam’s work as a freelance writer can be found on Building Product Advisor, a construction industry resource site.