When it comes to real estate investments, not all properties were created equal. If you want to invest in commercial real estate, you should know this is a totally different world from residential real estate. Here are some tips to help you find the right commercial real estate property.
- Do not rush into anything. When you are looking to buy a commercial real estate property, the process will take a lot longer than when you want to buy a residential home. The process to buy the property, renovate it (if needed) and sell it is lengthy. Patience is your friend in this process. You need to take your time when you are looking at the various properties that are available and when you are mapping out your plan for financing of that property. If you are expecting quick returns of your investment or easy money, this may not be the right investment strategy for you.
- Go big or go home. Some people think that they can “get their toe” wet by buying an apartment building with five units. They think that they should start with a small building and work up to managing a larger building that has ten or even 15 units in it. The kicker is that it takes really no more work to manage a ten or 15 unite building than one with only five apartments. The larger buildings will make you more money and are more cost effective to buy and run. Go for the bigger building if you can.
- There are other kinds of residential properties, if that is your goal. If your answer to the question, “why should i invest in real estate?” is, “I want to manage residential properties,” you may want to look at mobile home parks or others. Keep your mind open.
- While your mind is opened, consider non-residential, commercial properties. There are other commercial real estate properties you may want to look at. You can buy office parks, industrial complexes, undeveloped land and others. Keep your eyes peeled for new opportunities and you mind open to new ideas and you will find a commercial real estate investment that you can live with and make money from. Look everywhere for commercial real estate investment opportunities. Look at online sources, look in your local newspaper and look when you are out on the town. You really never know where the next great deal will be found.
- You will need to spend money to make money. At the beginning of the process, you are going to have to spend money doing your due diligence and research. When you have some properties you are interested in, they need to be inspected, appraised and generally researched. There may be rules, regulations and laws that require you to have other tests done on the property. This is not the place to scrimp. If you try, it will cost you a lot later on.
- Work on your funding options before you start looking at commercial real estate properties. When most people are looking to make their first commercial real estate investment, they need help with the financing. It is even worth it to loon into taking on real estate partners to help you secure financing but also to vent and to help with the process.
- Expect to spend a lot of time looking at commercial real estate properties and on the deal. As was mentioned earlier, commercial real estate deals take a lot longer than residential real estate deals. Your first investment in this area will take longer than subsequent deals because there is a learning curve in this, as with everything. Be prepared going in and your experience will be better.
Commercial real estate can be a great investment. The earning potential is great. If you are wondering, “why should I invest in property?” you should know that you are not alone but these investments are historically good ones. If you do your due diligence, learn about the industry and bring on partners to help with the financing and other aspects of buying real estate, the experience can be a good and profitable one for everyone involved.