While most people know and widely understand the residential real estate investment approach, the commercial end of the industry sometimes gets overlooked due to the nuanced nature and opportunity of the sector. Having said that, the diverse opportunities within the commercial division should drive investors toward it. You have options, and before you dive into a residential rental property, you may want to consider different, often times larger fish with a bigger profit opportunity. Sound interesting, but don’t know where to get started? You aren’t alone, so I decided to put together a few tips for dipping your feet in the commercial real estate pool.
Like the age-old saying, there’s no such thing as a stupid question so don’t be afraid to ask them. The more you know, the more likely you are to make a sound investment. If you find yourself asking what questions you should be asking, Kyle Pennell compiled a few questions to get you started like what kind of property and do you have a location in mind? You can find the full list here.
This is where commercial real estate professionals like myself and the staff at SVN Northco come in. Because the industry is so varied, you want to find a realtor or advisor that has experience with your type of property. One usually doesn’t assume that because someone can sell a house Minneapolis, they can sell a house in New York City or Dubai. They need to have an understanding of the industry, property type and location. Large real estate firms have diversified portfolios that often span the globe, and as a result, they have more experience with major transactions like selling a resort or even a private island.
As described by Inc., you don’t have to know everything. That’s why you seek help from others who make it their mission to know the ins and outs of the commercial real estate sector. “They can help you determine the right time to buy or sell, the right locations to consider, and the nuts and bolts of closing the deal.” Don’t be afraid to seek counsel from a lawyer, broker, accountant or all three.
Do Your Due Diligence
After you asked the questions and determined the property with help from your team of professionals, you now need to check the bones of the deal. Even if a property seems picture perfect, you want to ensure that it is a sound investment. If there are problems – you want to find them now rather than six months down the line when you already bought into the venture.
Once it passes inspections and your own personal expectations – it’s time to take the plunge.