Introduction to Buying Commercial Property
Investors want to purchase commercial real estate, and for good reason: it has proven itself to be a profitable investment. With that in mind, if you’re thinking of buying a commercial property, it’s critical to understand that with high rewards there also comes increased responsibility.
From examining the numbers to acquiring capital, buying commercial real estate will require more out of an investor than a traditional single-family investment. Buying commercial properties can be thought of similarly to purchasing traditional real estate, but on a broader scale.
As an investor, you will still need to conduct sufficient research and due diligence, but there will be differences in the numbers. Commercial properties often equate to higher purchase prices, longer leases, and increased rental income. To prepare for these differences, investors should ensure they possess the right systems in place. Not surprisingly, as you gain experience you will become more comfortable analyzing properties and landing deals.
If you want to start purchasing commercial real estate, or you simply want a better idea of what to expect, consider the most important steps in the commercial real estate buying process:
Purchasing commercial property in 5 steps
- Evaluate different commercial property types and which one is right for your situation.
- Lockdown your financing and/or funding.
- Establish the right team for the job.
- Identify a potential property in your market and analyze your investment.
- Make an offer and close the deal.
Tips for purchasing commercial real estate
Although there is no tried-and-true formula or one-size-fits-all strategy for buying commercial real estate, there are common guidelines that any investor can use to get started. Before you begin investing in commercial real estate, you should be clear about your objectives and know what you want. Some questions to consider:
- What kind of property are you looking for?
- Is it to rent out? To build equity?
- What area would be ideal?
- What’s your risk tolerance?
- How much are you willing to put into it?
- What skills can you bring?
- What skills do you need to hire for or contract out?
Get started on your commercial property purchase
Commercial real estate broker Lauren Hendricks is here to guide you on your commercial buying journey. Don’t waste your valuable time researching possibilities when Lauren can expertly guide you from financing to purchase.