Investing in Commercial Real Estate

Investing in Commercial Real Estate: It’s as Much a Business as an Investment

Let’s be clear, investing in commercial real estate can make you, and it can break you. To be sure, a lot of folks have made and lost fortunes in residential investing too. This article is about commercial investing, so that’s what we’ll consider here. That’s not to say investing in commercial real estate is really any different than any other business you may invest in. It has the potential to change your financial life, but without a serious business approach, you are almost dooming yourself to fail.

Unlike stocks, bonds, or mutual funds, investing in a commercial building is more of a hands-on affair. If you have a multi-tenant building, it’s even more so. That doesn’t mean you have to be the one to be hands-on, but someone does. There are so many tasks, and circumstances particular to your property, that may not apply to other like properties, that keep commercial real estate from being a passive investment.

Choosing Commercial Real Estate

Once you’ve decided what kind of property you want to buy, whether retail, office or industrial, you need to be sure to get a good price. You do that by performing thorough due diligence, to make sure you’re getting what you pay for. That is only the beginning though. You should maintain the commercial property with a competent contractor.  It should also be competitive, relative to its immediate market. It needs to have happy and successful businesses for tenants. Also, it needs to be watched for opportunities to reduce expenses and increase profits. These and other good landlord skills are needed to ensure your commercial investment continues to be worth your time and money.

Remember, you don’t need to be the one to do all of this work, and unless you are experienced at managing a commercial property, you really shouldn’t. Some of our clients who probably could manage their own property, don’t. There is so much more to consider than what’s here. If you want to learn more, check out our reviews, and ask us to help you.