Ever thought about buying commercial property? If so, there are some key questions to ask and actions to take. Almost everywhere we go, we’re surrounded by commercial property. We frequently see commercial property for sale. The question you may have is “is this property worth the investment?” That’s an excellent question and commercial brokers get asked this on a VERY regular basis. Read the excerpt below to get some great answers to that question. Then, consider reading the full article, by the original authors, on the SVN | Graham, Langlois & Legendre website. Below is just a tease, but the full article will cover the following bullet items… and more:
- Understand the different types of commercial real estate
- Analyze the benefits of buying commercial real estate
- Analyze the risks of commercial real estate investment
- Examine your investment strategy with an expert
- Find optimal financing
So, you want to buy commercial property? We’re not surprised. Commercial real estate is a favorite among investors as it offers strong returns with relatively minimal risk. As experts in finding and brokering commercial property deals we get lots of calls from family and friends asking, “I would like to buy commercial property! I found this great asset and want to know if it’s a good deal and what the next steps are?”
We thought we would share the expert knowledge we provide them with you. Read below to learn the steps to evaluating, and completing, a successful investment in commercial real estate property.
The 5 Steps to Buy Commercial Property
Understand the different types of commercial real estate
When looking to buy commercial property it’s important to first understand all of the different investment assets available on the market. Commercial properties may refer to: (For information on each, click the link)
- Retail buildings
- Office buildings
- Industrial buildings
- Apartment buildings
- “Mixed use” buildings, where the property may have a mix, such as retail, office and apartments
- Commercial land
- Self-storage buildings
Analyze the benefits of buying commercial real estate
There are many positive reasons to buy commercial property, but here are the biggest:
- Income potential – The annual return on the purchase price of a CRE property is 6 to 12% higher than a 1 to 4% return in residential real estate.
- Longer lease terms – The longer a tenant is in place, the longer it provides a steady income stream for the owner.
- Public eye – In retail investments tenants maintain their storefront, which has a direct effect on their business.