If you have paid close attention to the gradually improving real estate market, you may have realized that the current economy offers a unique opportunity to invest in commercial real estate. For those unfamiliar with the term, commercial real estate is property that is used strictly for business purposes. As a result, this typically consists of office space, industrial property, restaurants, retail buildings and multi-family housing units. Also called a real estate investment trust, or REIT, these properties offer investors and owners a number of benefits, including a consistent cash inflow due to rent and other residents fees associated with the property. However, these benefits can be difficult to experience if you don’t know how to invest in a REIT. For this reason, fledgling commercial real estate investors should remember three basic facts as they take their first steps into the commercial real estate market.
- Location is Everything– Before investing in commercial real estate, you should consider what makes this investment opportunity attractive to potential businesses and customers. Location is key in appealing to both; after all, are you likely to go to a restaurant or move into an apartment that’s in a strange neighborhood or in the middle of nowhere? Buildings can be remodeled, and business plans come and go, but a business’s location is difficult to work around.
- Screening Your Tenants Can Prevent Difficulties Down the Line– This may be obvious to some, but it needs to be said: do background checks on your clients. Ideally, you want a tenant that reliably pays their rent, doesn’t cause unnecessary problems, and is good enough at what they do that you don’t have to worry about finding a new business to fill the space. To find out if your prospective tenant fits the bill, talk to their former employers and landlords, and ask them questions about their experience in their industry. As charming as they may be in person, their record and ability are what will truly make them a good tenant.
- Consider Getting Some Outside Help– If you are having difficulty finding a good investment opportunity, working with a commercial real estate company can be extremely helpful. One example is American Real Estate Partners, which operates along the Eastern Seaboard of the U.S. It’s President and COO, Brian L. Katz, has over 25 years of experience in the real estate industry and has helped the company acquire, finance and maintain over $1.8 billion in assets. Accordingly, companies of this caliber will be able to help you identify and obtain the best possible real estate opportunities in your area.
If you’ve found yourself wondering “should I invest in real estate?”, there is no better time than the present to make a decision: currently, property prices are fairly low, creating an ideal opportunity to obtain commercial real estate at an affordable price. Additionally, the job market and overall economy have improved, allowing many entrepreneurs to seriously consider opening or expanding their own businesses. To decide if this opportunity is right for you, contact a commercial real estate company to discuss options available in your area.