Commercial properties can be a lucrative investment opportunity if you play your cards right. If you make a wrong move, though, they can easily become a money pit, too. The difference between a good investment and a bad one might come down to a single digit’s difference in zip code or issues that are even more difficult to detect. Making wise commercial investments, like anything else, is a learned skill. There are several precautions you can take, however, that are keys to avoiding investment disasters.
Always have a plan
You may be able to spot a good deal, but if you do not have a plan for it, you may quickly find yourself adrift and your investment depleting rapidly. You should always approach a potential property with a budget and projected timeline ready so that you know exactly how to get income flowing as soon as possible. Neglecting to do this is a surefire way to minimize your returns.
Understand what makes a good deal
You already know that location is one of the most important factors in determining a property’s value. There’s far more than just zip code to consider, though, when it comes to sniffing out a good deal. You will also need to be skilled in assessing a property’s condition, budgeting for repairs and upgrades, and negotiating to get the best price. Work on building these skills in addition to becoming familiar with your market’s areas.
Work with sellers who are motivated
Working with motivated sellers is one of the best-kept secret keys to securing profitable commercial property deals. When you have sellers who want to get a property off their hands, you have leverage. When you have leverage, you have the ability to negotiate a great deal and see some impressive returns on your investment.
There are many other important aspects to commercial investment, including legal details. Contact an attorney for more information on commercial real estate representation.