Have you ever tried asking a real estate professional about the advantages of investing in commercial properties? If yes, you likely triggered a monologue on how they are so much better than building a house. Commercial real estate owners get to enjoy bigger payoffs, reliable managers, open playing fields, beneficial economies of scale, and additional cash flow.
But how can you be sure that you’ll experience the same thing when you start investing? Well, success in this arena starts with a good plan. Here are a few tips you’ll want to keep in mind.
Tip No. 1 - Invest rather than accumulate
Obviously, you are investing your money into something so you can get a profit. This means that if you’re going to buy real estate that will not generate you any income, you are simply acquiring a property rather than actually investing. Keep this rule in mind when you’re browsing through market listings.
Tip No. 2 - Know there are expiry dates
Bear in mind that sooner or later you’ll have to spend money on maintenance. The building might need a new roof or the electrical system might require an upgrade. Every structure will go through these phases, even the double storey homes or display homes Brisbane has. Commercial properties suffer from general wear and tear as much as, or even more so, than residences. So have a long-term plan for the upkeep.
Tip No. 3 - Focus on one type of investment at a time
When you’re new to investing, it would be best that you focus on one type at a time, be it land, retail, offices, or industrial. Each transaction requires your undivided attention to ensure you always snag a good deal. Skip on average-performing properties and be a master of a single type when you’re still starting.
Tip No. 4 - Think about the environment
Hazardous waste is an issue you are going to have to deal with when owning commercial property. You have the primary responsibility for fixing any problems related to it, even if you might not be the one who caused it.
Tip No. 5 - Learn from the pros
Spare yourself from costly mistakes by getting a mentor or two. They can help you to connect with people and suppliers whom you’d never have immediate access to otherwise. Not to mention they can help you identify when you’ve missed due diligence items.
Tip No. 6 - Protect your assets adequately
As per a study from Precondo, personal injury claims and the like can be inevitable at times so you should do everything in your power to protect yourself. Determine how much is at stake if you lose a lawsuit and how your other investments would be affected. Ideally, you should talk to your lawyer to ensure that you have not overlooked anything with the legalities.
Tip No. 7 - Establish good relationships with others
Get connected with private lenders and other investors. They are important when you’re planning to build a house, but even more so when you are thinking to buy commercial real estate. Million-dollar properties are going to be impossible to acquire with your own financial capability so you’d have no choice but to work with partners. It’s wise to know people before entering into a partnership.
Following the above tips might not guarantee immediate success but they can guide you towards the right direction. If you’re looking for assistance in purchasing commercial properties, find an agent with us. Our team can help you get the best deals there are for your needs.
The news and advice featured on our blog are full of other great advice too so please check out our other articles to educate yourself more about commercial property investment.