While investing in commercial property has its risks, it is regarded as a generally profitable and wise financial decision. If you are prepared to raise the capital and dedicate your time to this venture, you have the possibility to receive significant and consistent cash flow. However, before committing to an investment property, you’ll need to make sure that you follow the proper procedures. Learning about your options and assessing the variables can help you receive the greatest return on your commercial propertyinvestment.
The first step is to analyze why you want to invest in commercial property. Set clear goals that are focused on financial gain or business growth. Having a plan will help you narrow down the available investment properties. Choosing the wisest investment property may seem daunting, but when you partner with a local broker you will be able to make the best decisions for your long term goals.
Be aware of the many types of properties available to you. The term “commercial building” encompasses a wide range of business spaces, including retail properties like malls, storefronts, offices, factories, and hotels. Each of these types of properties has a different set of investment pros and cons.
Know how much time you have to dedicate to your commercial property. As a landlord, you will have to deal with business owners or problems like slip and falls or vandalism. Different properties will require varying levels of time commitment. For example, retail stores close at night, so tenants are less likely to call with late-night phone calls about repairs. Large retail chains will likely expect a more distant professional relationship, while small businesses often prefer a more personal relationship. Understanding what your tenants value will reduce turnover.
Like any investment, commercial property investment has the potential for financial risk. However, there are many rewards to consider. The income potential of a commercial property is much greater than a residential property. You can expect a yearly return on your purchase price of about 6-8%. In addition, commercial tenants often sign a multi-year lease, which reduces turnover compared to residential leases.
The best way to make a wise investment is to talk to the experts. If you are still wary of investing in commercial property, speak with the knowledgeable team at Ullian Realty. We will guide you step-by-step in the investing process. Contact us today to learn more.
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