Many new commercial property investors make mistakes. While this is a normal part of many jobs experiences as you grow and learn, when it comes to investing in commercial property mistakes can be very costly. Ullian Realty in Brevard County, Florida has been a leader in the commercial real estate industry for years.
Take it from us, you don’t have to learn the hard way in real estate. Avoid these four mistakes investing in commercial property to ensure you learn and grow from the successful experience.
Mistake #1: Not Correctly Assessing the Value of a Property
How do you assess the value of a property? The quality of construction affects the value. The aesthetic appeal, age of the building, historic value, and many other variables need to be factored in to determine the actual property value. Where the market is in terms of potential buyers and risks involved with purchasing the property can also change the estimated value.
Mistake #2: Not Looking at Net Income
It’s important to consider both the gross income and net income. Take an inventory of the expected costs, such as repairs, monthly utilities, parking, taxes, and other fees. Is the net income worth the risk? Research the timeframe for city permit approvals. Purchasing a property and having to wait six months to obtain the proper permits can increase your costs.
Mistake #3: Not Working with a Team of Professionals
Yes, you know a thing or two about commercial taxes and real estate laws. These two areas alone can become complicated quickly and the laws change annually. Hire professionals – this will save you money in the long run, especially if you discover back taxes or other hidden pieces of information that only a trained eye will uncover.
Mistake #4: Not Doing Your Due Diligence
A commercial property may look like the perfect investment when you read through the listing. A building may only be a few years old, so you assume the foundation and HVAC systems are in good condition. What you may not know is that the building has flooded annually. Avoid making a bad commercial real estate investment by asking the right questions and doing your due diligence the first time.
Ullian Realty understands the importance of making wise commercial property investments. With over 50 years of combined experience, we know how the real estate market shifts and what to look for in Brevard County, Florida. Contact us to learn more about how we partner with our clients to help them find the right property for their investment goals.