Small is the New Big Thing in Real Estate
Micro Flipping is not the same as micro real estate, just as micro real estate investing is not the same as investing in micro real estate. Micro Flipping is just flipping a property, but doing it in a short period of time – the micro aspect is the time, not the size of the property. Conversely, Micro Real Estate transactions are for very small pieces of property where you might place an electric vehicle charger, vending machine, or shipping container farm.
Micro real estate? What’s That?
If you’ve never heard of Micro Real Estate before, then take a look at this introductory article on Micro Real Estate. Listing for locations are available on the microproperties page and listings for the hardware or machines that can be located on microproperties are also available. Leptonic is a proptech start up company that is set to shake up the vending industry.
Micro Flipping typically does not even involve renovations to the property, so the process is just to buy a property and then sell it for a higher price to someone else. Since there are no renovations involved, these deals can be performed in very short periods of time, potentially within the same week.
The profits from micro flipping are certainly smaller that a traditional flip that involves renovations, but the work is purely transaction so a micro flipper can execute more deals than a traditional flipper.
Passive and Semi-Passive Income
In contrast, passive income generated from micro real estate is either through the renting out of a micro property that exists on a commercial property you already own, or by renting a micro property and owning an income generating piece of equipment on that property, like a vending machine. Both investments can generate good cash flow.
There are other possibilities as well – similar to micro flipping, you could rent a few micro properties and then sublet them to another company that already specializes in vending machine routes – as long as your lease with the commercial property owner doesn’t forbid subletting.
In essence, you could really perform any typical real estate transaction with a micro property, as long as you set set up the contract to allow it. This gives you a way to invest in real estate with only a little bit of money. Hopefully this helps clear up the key differences between micro flipping and micro real estate.
Micro Commercial Real Estate
Typically, most micro properties are going to be on commercial real estate, so the term micro commercial real estate (micro cre) may be a more apt description, but there may be cases where residents rent out a small plot of land for an EV charger or a helium hotspot.
Since commercial real estate is all about making money, and micro real estate is a way to make money from unused pieces of space, then it is clear that if you optimize the micro real estate on your commercial property, that you will be able to extract more value from your commercial property, and can generate ancillary income.