Savvy travelers have long sought a hotel or vacation property that would allow them to easily walk the area they're most interested in touring for the duration of their trip. And it makes sense. Driving or navigating public transportation is time that could be much better spent enjoying the sights and activities they came for.
And now, an increasing number of people are beginning to desire that same convenience in their everyday lives, too. Why spend so much time fighting traffic when you could instead be...living life?
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Enter mixed-use developments. These real estate projects combine residential properties, generally apartments or condos, with commercial real estate. Let's take a closer look at these developments and explore their appeal for both residents and real estate investors.
Diversity is the name of the game
As you begin to explore mixed-use developments, also called live-work-play properties, you'll encounter a lot of variety. These properties can be a single building or a whole neighborhood of buildings. In the case of a single building, it might be several floors, with the top few being apartments and the lower floors being retail, restaurants, a gym, and possibly office space. The more sprawling developments might incorporate all that plus self-storage or even a movie theater, as well as outdoor recreation areas like parks and walking trails.
It's easy to see the appeal of these properties for residents. If the development includes a coworking space they can use and a supermarket, they could easily go weeks without ever leaving the premises if they didn't want to. And if it includes plenty of outdoor recreation space, they won't feel cooped up. Residents are also more likely to be able to get to know their neighbors a bit as they could potentially interact in so many more ways than in a traditional apartment building.
This diverse use of the space is exactly what makes these properties so fascinating for real estate investors, too. Most investors understand the importance of keeping plenty of diversity in their portfolios, and mixed-use developments represent the opportunity to gain a ton of diversity within a single investment. You would ordinarily have to make several completely unrelated investments if you wanted to draw residential and commercial rent from a wide variety of tenants.
Expect to see more mixed-use developments
Especially in big cities, where constant road work often can't keep up and getting around is a giant pain in general, the appeal of mixed-use properties is only growing. Many of us are recognizing time as our most valuable commodity, and these communities represent convenience as well as an opportunity for a great deal of time saved. If the mixed-use strategy makes sense to you, you may want to consider investing in some real estate investment trusts (REITs) that are moving in that direction.
