How to Successfully Invest in Commercial Real Estate

Commercial real estate offers investors a great opportunity to grow their wealth, with higher and more regular returns than with residential real estate, more and more investors are turning their attention to the commercial side of things. Like with all real estate, prices took a huge turn for the worst during the economic crisis of 2008 and it has taken a long time for the market to recover. Currently the market is relatively stable although it can often be sporadic and volatile, if you are smart and well informed then you can use these price drops as the perfect time to invest your cash. Commercial real estate is a very different kind of investment and if you are looking to get involved then here are some tips on how you can be successful.


Get a Great Broker

If commercial property investment in something that you want to get involved with then a great broker is essential. You can invest in real estate without a broker but in order to do so you really need to now what you are talking about. Using a great brokerage company like The Welfont Group will not only give you access to some of the industry’s experts but will also help you to save time and money. Throughout each part of the transaction your broker will be able to offer you assistance and impart knowledge, they will handle all aspects of the trade and will help you to find the property that you want. Having a great broker is key to success in commercial real estate investment.

Think Beyond Apartments

There can be a strong temptation to buy apartment blocks when you first start investing, naturally these will bring you some revenue month on month but this area of investment is very saturated. For years people have looked to apartments in order to get some return on their money which has driven prices up, you should be looking in to different areas of real estate if you want to get a better deal. Buying land, factory units, storage warehouses or office space can prove to be much more fruitful when it comes to your investments.

Go Big

Thinking big is the attitude that you need to have when you begin your investments, buying bigger will often get you a better price overall and you will see larger percentage returns over the years. For example if you were to invest in an office block with 4 floors of space, you will find that a block with 8 floors of space will cost you less per square meter yet you will be charging the same price per square meter when it comes to leasing out your space. Whilst thinking big will cost you more money, it can in fact save you money and make you more money in the long run.

Planning for Legal Requirements

Once you have an offer accepted, the law requires you to do due diligence checks on your property, these range from appraisals and surveys, to tests and inspections. The cost of this due diligence is far more with commercial real estate than with residential properties so ensure that you have costed this into your budget plans.

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