Micro Real Estate

Micro Property Investment

Real Estate Investing with a little money

How to make money with super tiny properties

Super tiny properties, or as we like to call them, Micro Properties, are a resource that is largely untapped except for being used as locations for vending machines and electric vehicle (EV) charger locations. There’s a number of ways to make small investments in properties, but the most recent way is to lease a micro property from a commercial real estate owner and put a vending machine on that micro property – which is a type of micro property investment.

Mature Micro Real Estate Markets

Vending machines are nothing new, as vending machines (and other Micro CRE machines like EV chargers) in their modern electrical from have been around for decades, and for much longer if you consider some of the ancestors of modern vending machines. This business model is well proven, and a large market – the income from vending machine operators exceeds $6 Billion per year around the world.

That’s a pretty incredible feat considering that there are only 15 million vending machines on Earth. So, on average around the world, a vending machine will make $400 per year. And vending machines that are in high traffic areas like hotels can make significant income for a small upfront investment.

Obviously, there is a lot of variability in how much income a vending machine can make depending on the macro location (what country/state/town/building) and the micro location (where it is located in the building and how much foot traffic it gets), but an average vending machine in the US will have an income of ~$3600 per year, and though that is much higher than the world average, it can still vary a lot depending on the location.

New Vending Machine

Given that a brand-spankin’-new vending machine will run you about $3,500 to $5,000 in the US (or more than 10,000 for an ice cream vending machine), so a 1 to 2 year payback period for your investment is not that bad. There are obviously other costs associated with owning a vending machine – like the items you are going to vend, or the gas it costs to fill up the vending machine each week.

There are also way higher end vending machines like for fresh made pizza and even just alcohol, so it is very important to determine up front how large of an investment you want to make.

The major hang-up is probably just the time it takes you to collect the money and re-fill the machine. It’s difficult to scale by yourself, so if you have a really busy vending machine, or you intend on placing a few vending machine then you should consider having a partner or hiring an employee.

Micro Property Investments are not really passive income because there are still some tasks that need to be performed on a weekly or monthly basis, but those tasks make money disproportionate to the short amount of time required. So, maybe not passive income, but certainly semi-passive income and definitely a side hustle.

Types of Micro Property Investment

There are a number of other investments that could be made in the micro property realm, but they all rely on the same basic notion of providing a machine to a location that can in turn provide a service or item to a customer. Then, the only “fee” for the investment is to just maintain the machine, both by stocking items and by repairing any issues.

Electric vehicle chargers are likely going to explode in popularity in the coming years, so that EV charger investments are certainly a growth opportunity.

Similarly, vertical farming and indoor farming in shipping containers is an investment area that is still in it’s infancy. Shipping container farms can be used for urban agriculture to grow food on rooftops, or in old vacant lots, or potentially in brownfields that have no other use. The food can then be grown right next to the urban consumers and restaurants (including ghost kitchens), which will reduce shipping cost and improve the freshness and taste for the consumers, and even provide more jobs for their communities.

There are certainly some even lower investment micro-properties, like parking spots or helium hot spots, so no matter what you’re budget, there is the potential for ancillary income.

Micro Property Investment Risks

As with any investment, a micro property investment does have some risks. For instance, it is probably a good idea to have insurance if you have a vending machine in a spot that does not have good security. You want to make sure that people aren’t trying to steal items from your vending machine, but more importantly, you want to prevent a loss from someone vandalizing or trying to open the machine and take the money out from it.

The probably of this risk is pretty small as long as you do your due diligence. The other risk is that you you are not making much money from the machine, but you can always mitigate that risk by moving that machine to a better location, either within the same building or to a new business’ building.

Luckily, vending machines are fairly robust, so you could buy a vending machine and move it around for many years if you want to try to optimize the revenue from it. Though technology trends like big data, and augmented reality may make you vending machine obsolete, even if you did just add a credit card reader.

There are a lot of simple repairs that you can do yourself, like fixing bill or coin jams, and Youtube is always a great source for information on how to perform some of the more intricate and potentially costly repairs.

Leptonic, Inc.

If you’re having trouble finding a location for your vending machine, look no further than the micro real estate website from Leptonic, Inc.

This proptech start up website is designed to allow businesses to list their micro properties for all types of small machines (similar to how you can list a property on Zillow or Redfin), so it is kind of like a zillow for vending machines or a zillow for electric vehicle chargers. See our blog for more information.

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