Commercial real estate can yield high profits with the right renters in place. Returns tend to be higher than normal and maintenance is low. Although an investor with a background in residential properties will likely be able to handle the process, there are some tips we think you should know before buying commercial real estate.
Understand Your Costs
There are a few key financial differences to keep in mind when considering a commercial property investment, as the associated expenses can be quite different from those for single-family residences.
Understand Your Tenants
Many people prefer commercial investments because the relationship with their tenants is usually more professional. Rent is often paid on time and defects and repairs are generally brought to light faster than with a residential rental. If your tenants will have clients coming to the building, they will want to keep things in good condition.
Do your research on the area and potential market for your commercial property investment in [market_city] so you can be sure to find a tenant that will stay long-term. Consider what sort of tenants your building will attract, as well as any competition they may have in the area from other businesses. Choosing an informed tenant will help ensure success down the road.
Get Your Financing Squared Away
If you’re considering a commercial property purchase, remember that you can’t use an FHA loan this time. You’ll either need the cash upfront or to be pre-approved for a commercial loan. Take note, or you could miss out on your perfect property simply because you lack the necessary funds.
Before you start your search, get approval so that you have the money ready for your purchase. It is common for first-time commercial property investors to seek out a partner to help with financing their endeavors.
Work With A Mentor
Collaborating with somebody who has prior experience in commercial real estate will help you advance as an investor in more ways than one. You’ll not only receive guidance when it comes to the ropes of the business, but also helpful intel regarding the real estate market in your local area. Here at Unify Capital Co., we work closely with individuals who want to invest in commercial real estate. Forming a well-rounded and prosperous portfolio is easy when you have reliable expertise on your side!
The ideal mentor will help steer you clear of many of the common mistakes investors make. You might also want to consider having a partner for your earliest deals to get a feel for things and minimize your overall risk. There’s no substitute for learning the business first-hand. Working with the right mentor, you’ll be able to pick up tricks of the trade that can’t be found in books or blog posts.
We specialize in commercial real estate and would love to help you with your needs. Call us now for a free consultation! (877) 864-3926.