Investing In Commercial Real Estate

The Best 5 Tips

Commercial real estate can be a very lucrative investment – when it is done right. Here are our brokerage’s best 5 tips for beginners looking to make a move into a commercial real estate investment.

1) Plan Your Commercial Real Estate Investment –

Have A Plan -

Consider the costs of investing in commercial real estate and make sure you cover those in your budget. Unlike residential real estate, commercial real estate requires more considerable sums of money upfront but has higher income potential.

Statistics -

The cost should be worth the length of the investment. Ensure you have a timeframe in mind and know whether you or someone else will be using the space.

Maintain Some Savings -

The best-laid plans sometimes get derailed. Get ahead of the anxiety of the unknown by setting aside a little extra in case something unexpected comes up.

Have A Backup Plan -

If you have an unexpected issue, like a tenant unexpectedly vacating the premise, make sure you have a backup plan that will allow for financial security in the time it takes to correct the issue.

2) Hire A Competent Commercial Real Estate Agent -

Has your agent ever worked with commercial properties? If not, look for an agent who has relevant experience. Commercial real estate is not the same as the residential real estate, and, as such, it requires a different set of players. Agents with a background in commercial real estate can connect you to a host of other industry players, such as lenders, lawyers, valuers/appraisers and property inspectors. Commercial real estate is a long game. You will want the right brokerbehind you.

3) Evaluate The Pricing (And Look For Hidden Costs!) -

You’ve worked hard for the opportunity to invest in commercial real estate. It’s time to make sure that money goes as far as it can. Before buying, compare the cost of your commercial unit with others in the same neighbourhood.
Be aware that you can always ask your real estate agent to validate pricing. And don’t forget to evaluate the age of the building, noting where costly maintenance may be necessary. These factors can stretch your buffer to the max.

4) Take A Walk Around -

Take the time to explore your neighbourhood. Are you 100% sure of the zoning of your commercial real estate property? Make sure you are aware of the factors that make YOUR commercial property the right property to make your investment.

5) Protect Yourself -

Once you’re sure that this is the right commercial real estate property at the right price, you need to protect your investment.
  • Find the insurance policy that fits your needs. Do you need insurance for just the property or for your mortgage, as well? It is essential to protect your financial interests in both of these areas.
  • Have a lawyer draft the control. You want to make sure you establish clear rules and legal obligations with your tenants. Employing the right professional will help guarantee a smooth relationship.



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