Investing in commercial real estate, especially for the first time, can be an intimidating yet rewarding experience.
Owning commercial property is a great way to increase your revenue and provide more value to your assets. Additionally, there are higher chances for profitability when you invest in commercial property instead of residential property.
If you are seriously considering purchasing a commercial space for investment purposes, make sure you don’t overlook these 5 beginner tips.
1. Start With Your Finances
Explore your financial options and have all of that information in check before you even think about anything else. It can be hard to get approved for financing, and you also need to know what type of package you are working with- the interest rate, coverage, and more.
2. Hire a Commercial Real Estate Appraiser
The most important thing you can do is make sure that you have a professional commercial appraiser come in and do an evaluation of the property. This will be the most reliable and accurate evaluation you will get to make sure that you aren’t being taken advantage of in an already competitive market.
3. Choose the Right Location
Make sure you do your research on the location of your property, as some cities have more regulations and different tax structures than others. For example, if you are purchasing property in Niagara-on-the-Lake, there are certain zoning bylaws you will need to adhere to. Additionally, you’re also going to want to know if this is a good location for the type of investment you’re making- is the market there?
4. Find a Mentor if You Can
This may sound cliche, but you learn from your mistakes, and you may want to consider talking to someone who has invested in commercial real estate before. They’ll share with you their experiences and the lessons they’ve learned, which will be a big help to ensure you don’t make those mistakes either.
5. Take all Precautions if You're Entering a Partnership
Many people invest with a partner in order to balance out the cost of ownership, but before you do this, make sure you have taken preventative measures. Even if your partner is your best friend, you never know how things are going to play out and it’s best to be prepared. Sign contracts, make business agreements, and secure provisions for the future.
Don’t leave your future up to chance. Hire a professional commercial real estate appraiser to make sure you are paying the right price for your investment.
