Are You Ready to Invest in Commercial Real Estate?

The commercial real estate market in San Antonio has certainly been on the uptick in recent months, thanks to a rebounding economy and lower unemployment rates.  So it may be time to, once again, consider investing in the commercial real estate market.San Antonio Commercial real estate

Before you dive in, however, it may be best to first ask yourself a few questions to determine if you are ready to invest in the commercial real estate market or if you should wait by the sidelines a bit longer:

Am I prepared to manage commercial real estate?

For many people interested in commercial real estate, the biggest roadblock is managing the properties. Yes, you can certainly pay someone to do this for you, but then you are cutting out a large portion of your investment return. Instead, it may be best to learn how to properly manage a property so you can make a better return on your investment. In addition, managing your own commercial real estate allows you remain hands-on and allows you to really understand the ins and outs of commercial real estate so that you can make the best decisions regarding your investment and future investments.

Am I prepared to buy more?

When you consider purchasing commercial real estate, such as an apartment building, for example, it is important to understand that buying more costs less. You may be hesitant to purchase a 10-unit apartment building over a 5-unit apartment building, but buying the larger building just makes better financial sense. You will likely need to secure commercial financing for both properties, and you can bet the 10-unit building breaks down to much less money per-unit than the 5-unit building.

Am I prepared to wait for a financial return?

Are you in a financial position to purchase a commercial property and patiently wait for a financial return? If you are not in a financial position to be able to hold the property for a period of time without running into cash-flow problems, then purchasing commercial property probably isn’t the best decision right now. This is because the process of purchasing, possibly renovating, and then leasing commercial property takes time. Further, completing a commercial real estate transaction also generally takes more time than a residential real estate transaction. In other words, investing in commercial real estate is not a quick-rich scheme, but a long-term investment for the savvy buyer.

Do I know what type of commercial property is best for me?

There are many kinds of commercial real estate you can purchase, and each has its own set of advantages and disadvantages. Therefore, it is best to do your homework and talk in length with a trusted real estate attorney or other real estate professional to determine which type of commercial property fits you best. For example, an apartment building may be smart investment for one buyer, but may be nothing more than a hassle for another, while purchasing an office building may be great for one buyer but a nightmare for another. In other words, make sure your commercial real estate purchase will help you reach your personal and financial goals.

Posted by Richard Soto on
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