Go For Gold – 4 Strategies For Finding The Best Commercial Real Estate Investments
There’s no denying the benefits to be reaped from investing in commercial real estate. Ask any expert and they’ll tell you, such properties are the keystones for a sound real estate investment strategy. The accumulation of tangible assets will diversify your portfolio, generate cash flow, and can even help you out come tax time. However, determining where, what and when to buy can be tricky as not all markets are made equal.It’s certainly not difficult to find commercial real estate for sale. Where most people struggle is with finding properties that have a profitable outlook while also fitting their needs and budget. Apply the following four strategies to your search and you’ll be on your way to a diversified (and profitable) portfolio in no time:
1. Don’t Be Afraid Of Data
It can be tempting to conduct your search based on the areas convenient to you and the ideas you already have in mind. However, if you fail to access and analyse all the relevant data, you’re in effect searching blind with no genuine understanding of the ROI you’re likely to receive from the properties you’re considering. There are several key factors to look out for when considering a property investment. Before committing your capital, you need to collect data on each of them to truly be able to weigh up the risks and benefits and make an informed decision.
2. Seek Out Motivated Sellers
Suitably armed with all this data and the depth of understanding that goes with it, you will be brilliantly equipped for price negotiations. To help you with this even further, before searching for commercial properties, you need to educate yourself on how to find motivated sellers. Whether they’re struggling to keep up with payments or are simply moving to a new city, these people need to sell fast, which means they’re willing to drop their price (sometimes drastically) if you know how to push the right buttons.
3. Know the Formulas
Commercial real estate investing is built on a foundation of data collection and calculations. In addition to this, an understanding of real estate finance is vital if you wish to be a true contender in the game. Some of the key formulas you need to be thoroughly familiar with are net operating income, the cap rate, and cash on cash return. If you’ve never heard of these before, there are real estate calculators that can help you make up for your lack of knowledge.
4. Enlist an Expert
If all this talk of formulas, data collection and analysis sounds daunting or far too time-consuming, rather than skipping these vital steps and winging it, hire a professional to take care of the grunt work for you. The best part is, once you’ve found a brilliant property management company, you’ll be able to retain their services after your investment has been made. These people live and breathe to get you the best return on your commercial property investments. They’ll deal with tenants, handle maintenance issues, and even take care of dirty work like evictions if necessary.
Commercial real estate investment is one of the most reliable ways to build wealth. However, it’s not always easy to know where to start, what knowledge to arm yourself with, and where to look for the best deals. If you take some time to dive into the data, learn the formulas, and figure out how to spot motivated sellers, you’ll be well on your way to a healthy ROI. If all that sounds like too much work, there’s always the cheeky shortcut of simply hiring a professional.