Property management is a hot business to in. The industry generates about $60 billion of revenue every year. There are nearly 110 million people who rent their homes in the United States. Less than half all people who rent live in a single family home. If you are considering making a commercial real estate investment, these tips will help you make that a success.
- Go big or go home. It may be counterintuitive but if you have your choice between buying a five unit apartment building or a ten unit building, you might get a lot more bang for your buck by going with the larger building. This is because the larger and smaller buildings may include a similar amount of work to procure and maintain but the larger will also bring you more profit. It does really not take more work to manage ten units than five.
- Open your mind to different kinds of buildings. Is your heart really set on a residential real estate investment ? For some people that is what they have always wanted to do. If you just want to have an investment that will pay off, consider other kinds of buildings. Look at office building or industrial parks. There are a lot of options so do not limit yourself, again, unless you have always wanted to manage one kind of building. Look at your city or region. There are times when one kind of building makes more sense than another.
- Do not be afraid to spend some money doing your research. Any money and time you spend doing the research before you buy or get financing will pay for itself later. This is one area where it is crucial that you do not cut corners or scrimp on time. You need to get the best deal and do all the legwork. Research the properties that interest you. Get the appropriate inspections. You do not want to find out very late in the process that the building you really like is about to fall apart. Finding the right commercial real estate investment is all about doing the legwork.
- Look for the best financing options before you find your property. Sure you know you want to make a good commercial real estate investment but what is your credit like? Get your credit report. Go to banks and credit unions and talk to them about your options in terms of financing. Depending on what you are looking to do, your city and/or your county may have grants available. If you are going to open a new office building in your city, there may be programs aimed at helping you do that as this could encourage more businesses to settle in your area. Your government officials may know of funding opportunities. Do not hesitate to contact them.
- Find people who will give you honest answers. When you are making a commercial real estate investment, you do not need a lot of people around you telling you how great you are. This is not the time to surround yourself with “yes” people. You need to hear the honest truth. You find a building you love and think it is in the perfect location. You need to know that a serial killer who tormented he city for a decade (years ago) used to live there. Now, you may still want to buy the building but you should have that information before you do.
Making a commercial real estate investment can be great for your bottom line. It will take a lot of work on your part both before and after you decide to buy a property. That should not dissuade you from taking this path. It can be very lucrative and be a great way to make a living. When you think about managing apartment buildings, consider that the vacancy rate in the United States is a low 6/9%. Nearly 35% of all people in this country rent their homes. This means you should have no trouble renting your property. You can also hire companies to help with managing your property. No matter how you slice it, commercial real estate will always be a good, solid investment option.