Whether you are interested in starting your own business or simply buying commercial property as an investment to rent, it is important to know what you’re getting into. It is much different than residential; the rules are different and therefore the buying process is different as well. As someone new to this industry it is always advised to start off with small commercial property until you get the feel for the market and then expand to larger properties as your confidence and track record grows. Below are a few tips to get you started on the right track.
Hiring a commercial real estate broker is the first and most important step you need to take. Not only can they help you learn the ropes of the industry but they can help save you from making mistakes if you were to venture out on your own. A broker is familiar with the market of your area, they know the pricing, they know what to look for in terms of location and size and these are all factors you may not be 100% sure of and this is why you’ve hired your broker. When you deal with a seller they know your broker is taking charge but you are the one with the final decision and they will try and “sell” to you so beware and trust in your broker to help you make the right decision for what you’re looking for.
As a newcomer, you certainly won’t be able to find space within the already established commercial areas of your community but your broker should be able to steer you towards an upcoming boom. There are always secondary commercial areas to consider that get nearly as much traffic as the main center and these areas are your target locations. Also, these up and coming locations will be much more affordable than the main commercial center that has already been driven up to prices only the multimillion dollar corporations can afford. Always keep your budget in mind. It is important to find a great location but if you can’t afford it, move to the next best option to avoid unnecessary real estate debt.
No matter what the reason is you are looking into commercial real estate you want to look at the property and decide how and if it can be quickly turned over if necessary. Real estate professionals always talk about inflation income potential and this can be possible in the up and coming commercial areas just as within the main commercial areas. Inflation income means that the property you’ve purchased is in a desirable location that within a year or two, the rest of the community will realize and more and more people will want in. It always helps to be the first one in on a new development and a good real estate broker can help find these locations for you. Commercial real estate is all about investment when it comes to the bottom line so always make sure you are going to get your money back and then some when the sale is made.