You have probably known that investing in commercial properties lets you make some money. As with other investments, your commercial property investment can go either way. Although a number of property owners make more off commercial than they do residential, some factors affect your investment decision. Béatrice Baudinet will walk you through the buying process. If you are investing in commercial property, consider the following:
The Surrounding Area
If you are like other investors, you do not want to invest in a property located in an area that is experiencing a downturn. Your commercial property plays an important role in keeping the area strong and serving trends projected to benefit the surrounding neighborhood. You will find this especially important if you want to develop the property on your own.
Are you looking to take on a building with businesses occupying it? If so, the kind of business they do can be a consideration when making your buying decision. For example, a lot of food service establishments may be late in their rent. Think about the financial stability of the current tenants that operate on the property and whether or not they have the capacity to cover expenses in case they fall behind.
Your Working Hours
Even if you are a landlord, this does not mean you don’t have to do anything. Keep in mind that your commercial real estate requires you to regularly get involved in the running of the asset. Consider all the hours the tenants will be open and these will also be your working hours. Such hours are most likely to be when you have to deal with damage, utility failures, or structural issues.
Your involvement in running your commercial property will determine its profitability. As you start, this can take some patience because commercial real estate investments don’t come together quickly. While apartments can be easy to fill, keeping a tenant in the retail space and doing necessary renovations will not be an overnight venture.
The Commercial Property Market
Whether you are looking to buy or lease a commercial property, you must consider what the market suggests about the property you are considering buying. In case you are going retail, determine the impact of online shopping on your ability to procure and retain quality tenants. Does your office space attract businesses that are likely to move online?
Any commercial property comes with some risks. For instance, any property with high traffic is at risk of accidents such as falls and slips. Also, commercial space is prone to vandalism. Ensure you are prepared to deal with these risks.