There can be pros and cons to investing in commercial real estate. You can earn a lot of money through real estate investments, but you can also lose your investment and end up in a worse position than you started in. You will be a success if you make the right choices and invest in the best properties. Read on if you need help understanding how to make your first commercial real estate investment.
An essential fundamental of commercial property is location, location, location. For example, consider the surrounding area and local neighborhoods. Compare this neighborhood to the growth of other similar areas. What you are seeing now in terms of commercial potential might be very different a few years from now.
When choosing between two similar commercial properties, think large scale. If you will be financing the purchase, you should take into account that doing so will require just as much time and effort for a small lot as it will for a larger lot. Think of it like purchasing in bulk; as you buy more, each individual unit costs less.
When you’re trying to decide which broker you should work with, take their experience in commercial real estate into account. Be sure that they specialize in the area that you are buying or selling in. When you find the right broker, make sure your agreement is exclusive.
Choose simple, strongly constructed buildings if your plan is to purchase real estate for the sole purpose of renting or leasing it. These are the most likely to quickly invite tenants into the space, because they know it is well-cared for. Because these properties are in great condition, the property owners and the occupants will have a simpler time with basic maintenance service.
Do your best to have your properties occupied at all times. Having unoccupied spaces mean that you have to pay for their upkeep. If you have multiple vacant properties, figure out why this is, so you can understand why your tenants are leaving.
Make sure you have sufficient utility to access on any commercial piece of real estate. Your business is sure to have unique utility requirements, but services typically required by most include sewage, water, power, telecommunications and maybe even natural gas.
As you now know, investing in commercial real estate may not translate to easy money. It takes effort, time, and a lot of money (initially) to be successful. That, though, is still not a guarantee that you will make money, and you could possibly still lose money.
There are tremendous opportunities for small businesses and social entrepreneurs to support their communities through community foundations, donor advised funds and other means of giving back. Find the neighborhoods in Erie, Pennsylvania where you can make the most impact on education in the community.