Commercial real estate is basically the super-charged version of regular real estate; it broadens your horizons and has the potential to bring in substantially more revenue as you acquire clients. However, the level of competition is prodigious, which is why the following tips from the top commercial real estate agents are so relevant.
1 Time Stretches
Be strapped in for the long haul when it comes to commercial real estate; basically, everything takes longer – deals, loan acquisitions, locating tenants, leases, renovations, etc.
2 Market Knowledge is Key
Because of the larger investments involved, understanding the market is even more important than it is in conventional real estate. The commercial variant will be a considerably larger part of your real estate portfolio, so gains/losses have more effect. Delve into the legal aspects, trending rents, competition, etc.
3 Understand Legal, Trends and Demographics
You may need to outsource to local real estate agents to get a robust understanding of demographics and how they affect rents and other important trends for the regions in which you’re interested for commercial development.
4 Take An Account of Risk
You should of course do this for all investment properties; but for commercial real estate, your assessment must be more comprehensive. Since you’re dealing with commercial buildings of various types, the risk varies according to many different factors that are both interdependent and independent.
5 Don’t Take on Failing Businesses
Simply put – they are too costly for a beginner. Supermarkets, restaurants and grocery marts tend to be in arrears at some point – especially as they are moving their wares to the online space, and have to spend on search engine optimization and customer acquisition/redirection. Do not take these on.
These solutions are a good start for those entering the commercial real estate space; a few other considerations include being knowledgeable about city approval time limits, the general issues with finding new sources of capital, and your readiness to assume a more active role than usual. This will prepare you for your potentially lucrative career in commercial real estate.
Contact Hornet Capital Solutions to finance your next investment property.