Do: (Confirm the authenticity of Commercial Status)
Commercial properties are tricky in the sense that they are difficult to identify. Legality is a huge aspect of it and new investors commit the mistake of buying “fabricated” commercial properties which for all intents and purposes are either public property or residential.
Don’t: (Go in “Blind”)
Many new investors devote their finances without doing enough research on a commercial property. Real estate investors should do systemic research before signing the dotted line. The premises, the development nearby and the profits gained by other investors in the area should all be looked into. Hire professional consultants if you have to.
Don’t: (rely on inflation)
Property investment does provide huge dividends but it can also backfire in times of political uncertainty and turmoil. Inflation can be a double edged sword; it can hike rates but also cause a plummet in the number of investments.
Do: (Due diligence)
When considering investing in commercial, one should conduct the necessary technical due diligence. The structural integrity of the building, business zoning rights, site development plans and any other restrictions should be worked out beforehand.
Don’t: (Rush in headfirst)
As the investment starts to pay, people are inclined to dive further in the sea of real estate. It is essential to assess the monetary profits that are attained because it can just be a flash in the pan. Market situation needs to be reviewed and allowed due time to display the full range of ebbs and flows of the commercial investment. This will make you better equipped to decide in a better way for future investments.
Once experienced enough, one should consider diversifying their investment portfolio by investing in different locations as it provides a better chance to even out the profit/loss margins even in times of uncertainty.
Do: (Realistic Review of investment)
Always keep a realistic view of what this investment can do for you. Make a plan for the next 36 months and estimate your gains accordingly.
Don´t: Underestimate the value of a stable tenant
Consider renting your property to those, who have a smooth business operation. A stable tenant for your property might ensure a continuous and hassle free income stream.
To sum it all up, be realistic, do your research and if possible, diversify your investments. Commercial property can be your key to a fruitful future, but for this to happen; you need to be vigilant in your approach.