Helpful Tips For First-Time Commercial Property Investors
Category Advice
As a business owner or first-time investor, owning commercial property - and the right commercial property - can be an excellent idea with lucrative benefits. That said, such an investment also comes with its own set of challenges and risks.
Like any big venture, making this kind of investment should be well-researched, properly thought out, and backed by professional advice and support. Before you start a serious search, it's wise to look at the state of the market and a number of other important factors.
Below we unpack some things you should consider before starting your commercial property search.
Top Tips For Investing In Commercial Property
Consider Your Needs and Goals
Be sure to define your objectives for your investment, such as cash flow, appreciation, or a combination of both, and lay out realistic timelines for achieving them. If you are a business owner wanting to run your operations from your property, think about what you will require from the property you choose.
Consider factors such as:
- Location
- Public transport access
- Parking
- Storage
- Traffic flow
- Branding visibility
- Neighbouring buildings
- Surrounding areas
- Zoning restrictions
Consider The Market
Research the market extensively, as you aim to understand the local market trends, vacancy rates, and demand for commercial properties in the area you're interested in. Investigate the economic conditions and potential for growth in the region. Keep yourself updated on changes in the real estate market, regulations, and tax laws that may impact your investment.
Consider Your Team
Build a team of reputable, knowledgeable professionals who will support and guide you throughout the investment process. A real estate agent, attorney, accountant, and property manager will all form a solid team that will provide you with valuable advice during each phase.
Consider The Risks
Doing due diligence is the key to navigating what can be a risk-filled venture. Conduct all the necessary protocols as you consider potential properties, including physical inspections, financial analysis, and reviewing all relevant documents such as leases and property history. Doing so will help you avoid making some of the more common mistakes made when buying commercial property. If anything looks or sounds like a red flag, it probably is. Your advisory team will play a critical role here.
Consider Your Finances
Start exploring your financing options, including loans, partnerships, even crowdfunding platforms, to determine which one aligns best with your financial situation and goals. Lay out a thorough and detailed budget to help you accurately assess your potential cash flow, including:
- Operating expenses
- Property taxes
- Insurance
- Maintenance
- Property management fees
- Funds for unexpected repairs
- Funds for vacancy periods
Consider a Property Manager
Once the ball is rolling and you have made a decision about investing, you will need to decide whether you will manage the property yourself or hire a professional property management company to do it on your behalf. Property management can be time-consuming but is crucial for maintaining the property's value and cash flow.
Looking for a commercial property manager? Call us!
Our exceptional property management team has years of property experience and a passion for helping businesses manage their properties seamlessly. Get in touch with us today and let's start the process.
Author: SAProperty.com
