As investors build plans for real estate, let’s remember that historically, commercial properties provide greater returns, but they’re also more complicated that residential real estate investments. The advice below can help you invest in commercial real estate.
Start Big
It may seem counter-intuitive, but it’s typical for beginners to begin by purchasing multiple commercial properties. As long as they’re in the same building, managing two units is just as difficult as managing 15. Starting out ‘big’ will also give you more experience up front working with different kinds of tenants—an experience that will come in handy down the line.
Get the Inside Scoop
Residential real estate has many snags and secrets that investors learn over the years, and commercial real estate is no different. Don’t shy away from getting advice wherever you can. Investors with experience in commercial real estate can help you from learning lessons the hard way.
Be Patient
On average, the process of purchasing, renovating, and selling a commercial property takes longer than residential properties. This process may not be a bad thing if you’re just starting out. Just don’t expect things to move as quickly as residential real estate. Commercial properties tend to be more profitable, but only for those who wait.
Recognize Diversity
Many investors choose apartments or condos by default. There are lots of options out there, from industrial spaces to storefronts. Do some research and figure out all your options before settling on an investment.
Make a Time Commitment
You’ll likely have to put in much more work up front to get a commercial space ready for sale, so expect to make lots of time for your investment. Everything from screening properties to making offers is more time intensive than with residential properties.
Do Your Homework
The commercial real estate game may appear similar to residential, but the formulas and factors that make it run are completely different. Do your homework!
Focus on Relationship Building
As opposed to residential real estate transactions, the value of relationships with lenders and private investors is far more important in commercial real estate. Many commercial properties are sold before even being listed. To find the best properties, you’ll have to network.
Working with Vanguard Title
If you’re interested in commercial real estate, you’ll need a full-service title company to help you along the way. Vanguard Title has years of experience working with realtors, lenders, buyers, and sellers. Visit our homepage for more information about our services.