Most smart financial experts would tell you it’s important to keep your investment portfolio diverse these days. Maybe even more so than ever. It’s wise to consider options beyond stocks and bonds. A real estate investment has the potential to pay off if you know what you’re doing and what to look for. Understanding commercial real estate before you invest is crucial for success. Here are a few things to look for in a solid commercial real estate investment.
Demand-
If a real estate investment opportunity comes up in a location buzzing with activity, there’s potential for it to be a good investment. Are the rents high and the buildings full? Is there a significant amount of popular entertainment and/or shopping options? If you’re investing in a place in hopes that it will one day be a high demand location, be sure your projections are reliable. There’s always risk involved investing in a location that isn’t currently in demand. That said, the market is always evolving. Your trusted commercial real estate broker can help you navigate this process and advise you each step of the way.
Would You Want To Live There?-
Investing in a multi-family property such as an apartment complex means you are investing in a product that must appeal to potential customers. A good product sells and a bad one generally does not. Is the property a sound and compelling design? Is in a good location and built with high end materials? Or is it in an unproven location and made of shoddy building materials and thrown together as cheaply as possible. How are the aesthetics of the property? Is it easy on the eyes, or more of an eyesore? Investing in high quality property matters.
Price Tag-
Is an investment a wise financial decision? Like any other purchase, the cost should be reasonable and of course, you’d like to get a great deal. Is your investment cheaper than what it would cost to build the same property in the present market? If you can buy it for less than it would cost to build it, this may be a sign of a solid investment. Again, your expert commercial real estate broker can advise you on this and other investment issues.
These are just three things to consider before taking the plunge with a commercial real estate investment. Make sure you do your homework before taking any risks. Let the experts at Coldwell Banker Commercial Wallace & Wallace lend our knowledge and expertise to your next investment deal.