Commercial real estate and residential real estate share similarities and differences, both of which investors should be aware of. Expenses are generally higher with commercial real estate, for example, but can be shared with tenants. A commercial property usually generates more cash flow at the end of the day, so when it comes down to it, the higher expenses aren’t that big a negative.
If you’re interested in the world of commercial real estate, you’ve come to the right place. Here are a few tips to consider when breaking into commercial real estate investing.
Utilize Realtors Specializing in Commercial Real Estate
You may not know it, but residential realtors and commercial realtors are completely different. If you’ve used a residential realtor in the past and you trust his or her judgment, ask them to refer you to a commercial realtor. Get to know this new realtor as well as you can and be open about your investment goals so they can help you find the property that suits you best.
Find Ways to Make a Property Profitable
When securing a commercial loan in real estate, you’ll quickly realize there aren’t a lot of properties to choose from. However, you can still usually find a property to get started with. What most successful commercial real estate investors do is use their creativity to help make a property more profitable. This could mean renovating a building to create more open space for conferences, or it could mean reducing the open space to create more offices for potential tenants. There isn’t a single surefire way to make every single property attractive to businesses, but having a creative mind can go a long way in helping you improve your investment.
Evaluate The Market Before Investing
The unique thing about commercial real estate investing is no matter how glamorous the property is, it won’t be a profitable investment if the market doesn’t need the product or service. Do a thorough market analysis with your commercial realtor to determine what consumer needs could be met in a certain area. A property in an area saturated with other commercial properties could benefit from the surrounding activity, but it also could be a failure depending on the type of tenant you have on the property.
At Commercial Mortgage Connection, we spend more time with our clients than other commercial mortgage lenders because we want your investments to succeed. Contact us today to learn more about how our services can help you break into commercial real estate investing with ease.