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10 Most Affordable States to Buy Commercial Real Estate

Published: 05-02-22 Category: Investing

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Buying commercial real estate can get expensive, but it doesn't have to be.

The following ten states are both affordable and friendly for developing or buying commercial real estate properties.

#10 – Indiana

Indiana is both affordable and friendly for businesses seeking to lease or buy commercial real estate. It has a relatively low cost of living, among other factors.

It's also a fairly populous state, which means there are plenty of people to lease space to and complete business transactions with.

#9 – Michigan

Michigan has an abundance of options when it comes to commercial real estate. The state is located within a prominent Midwestern region that's known for its manufacturing, infrastructure, and other industries.

It also has a high concentration of corporate headquarters, which means there are plenty of customers to lease space to or sell products and services to.

#8 – Missouri

Missouri's both affordable and friendly for businesses looking to buy or lease commercial real estate.

It has a relatively low cost of living, it's well-connected with major cities, and it's home to a number of Fortune 500 companies such as Monsanto and O'Reilly Automotive.

#7 – Tennessee

Tennessee has a very affordable cost of living, which is good news for businesses looking to open shop there.

It's also well-connected with major metropolitan areas such as Memphis and Nashville, and it boasts an active commercial real estate market.

#6 – Georgia

Georgia is a popular state for businesses to set up shop. It has a thriving commercial real estate market, which includes major cities such as Atlanta.

It's also relatively affordable and boasts a large population, especially in metro areas.

#5 – Arkansas

The state of Arkansas is home to Walmart, and it's also a popular choice for businesses looking to secure commercial real estate.

It's also relatively affordable, easy to navigate, and offers access to many neighboring states.

#4 – Alabama

Alabama is a vibrant state with a great deal of commercial real estate. It's also relatively affordable, which is important when looking to sell or lease space.

Commercial real estate in Alabama tends to have high demand near universities or for industrial spaces, which means there usually aren't any problems when it comes to renewing leases and acquiring new tenants.

#3 – Oklahoma

Oklahoma is a popular state for buying commercial real estate. It's affordable and boasts very affordable commercial real estate, especially compared to neighboring Texas.

Oklahoma City, the state capital, is a major economic hub that's known for its aviation, biotechnology, healthcare, and energy industries.

#2 – Kansas

Kansas is a huge state with very little population density. This means there's plenty of space to lease or buy properties.

It also has a relatively low cost of living and there isn't overdevelopment.

Those are two attractive factors for businesses looking to lease or sell commercial real estate.

#1 – Mississippi

Mississippi is known for having the lowest cost of living in the United States, which is great news for businesses looking to lease or sell properties. It's also very accessible, and there's a lot of space to work with.

Those factors make it the most affordable state in the country for commercial real estate.

Reasons to Buy Commercial Real Estate in Affordable States

Buying affordable commercial real estate may seem like a risky endeavor, as investors want to be able to grow their portfolios with high-value assets.

However, there are actually many reasons it's worth considering buying commercial real estate in the most affordable states.

Whether you're looking to start a new business or just have some extra money to spend in your commercial real estate investment portfolio, consider these four top reasons to buy affordable commercial real estate.

Affordability

Though it's not the primary purpose of investing, affordability is a major reason to buy affordable real estate.

Because of the high cost of operating and maintaining commercial space, this is one way to cut costs and save money.

Availability of Space

The most affordable states for commercial real estate tend to have a lot of space available. If you need a larger facility or property, it's easier when there's so much more space that is left undeveloped.

For larger mixed-use development projects, the availability of space is a must. The less you can pay for the initial investment, the more that can go toward improving or building out the space.

High Growth Potential

Some may be worried about the potential for slow growth or stagnant commercial real estate markets in places like Tennessee and Arkansas, but this actually works in favor of real estate investors.

Because commercial real estate is so affordable, it's more likely that companies will consider moving to a state like this and starting operations there which will actually boost the economy and make it easier to turn a profit on your investment.

Many areas that are expensive and popular today didn't start that way. Over time and with more commercial investments, these areas have a better chance of thriving.

Low Risks

The risk of investing in real estate is always there, but cheap commercial real estate brings down the risk even further.

You invested less in the property in the first place. Not that you want to take a loss on an investment, but it's riskier to lose out on very pricey real estate in bigger metro areas like New York City.

Not only are you likely to save money by buying at a lower price point, but you're also able to diversify your portfolio by purchasing across multiple states.

This will help spread out the possibility of risk and keep you safe if any single state that may experience a slow or stagnant economy.

Due Diligence and Your Own Research Are Key

There are a number of reasons why you should consider buying or leasing commercial real estate in one of the states featured on this list of the least expensive states to buy commercial real estate in the United States.

They're all affordable and friendly, and they have large commercial real estate markets that see plenty of activity.