Commercial real estate investing can feel intimidating – there’s a lot of differences between commercial and residential real estate, and many people aren’t sure where to start or if commercial real estate is worth it. Investing in mixed-use properties is a great solution to this issue – it allows you to combine the benefits of different property types into the same investment.

What Is Mixed-Use Development?

Mixed-use developments are combinations of residential and nonresidential buildings that have been planned within a city, municipality, or state. Projects can range from a single building to an entire neighborhood in scale. Developments like this offer a wide range of benefits, including: 

  • Improvements in residential affordability
  • Walkability between housing, amenities, and even workplaces
  • Stronger neighborhoods

When done correctly, these types of developments are designed to take elements of different types of real estate and use them to complement each other.

Benefits of Mixed-Use Developments

Mixed-use developments are on the rise – the demand mostly comes from new millennial homebuyers, but many types of consumers seek the deeper sense of community and convenience that developments like these provide. Benefits for investors include: 

  • Different types of clientele provide multiple streams of income from the properties
  • Property managers assist with smooth business operations
  • Proximity to amenities makes them highly desirable as residential spaces
  • Variety of tenants lowers risk for investors
  • High rental demand

Mixed-use properties don’t show any signs of falling in popularity in the next few years, and they could make excellent investments for business-savvy individuals looking to expand their portfolios in new directions.

Potential Risks of Mixed-Use Developments

On paper, mixed-use developments sound like a great investment. And they are, but you should be aware of the potential drawbacks before investing in a particular property. Some areas may not be suited to the increased foot traffic created by these types of properties – you need to check how pedestrian-friendly the surrounding area is and what sort of access to public transportation is available.