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5 tips to follow for successful commercial property

by SmallBizViewpoints
October 29, 2018

5 tips to follow for successful commercial property

by SmallBizViewpoints
October 29, 2018

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Today, more and more investors are steering away from residential real estate in favor of the more lucrative commercial sector. Unlike residential properties, commercial real estate offers longer lease terms, fewer ongoing expenses, and a significant return on investment. As long as you do your research and understand the risks involved, commercial property can make for a fantastic addition to your portfolio. Here are some tips to get you started:

  1. Hire a Property Manager

    While owning commercial property can be rewarding, first-time investors are often caught off guard by how much work is actually involved. Selecting tenants, setting lease terms, chasing up late rent payment and arranging maintenance are just a few of the things you can expect as a commercial property owner. Fortunately, there are plenty of commercial property management services available that'll help you save time by completing these tasks for you. Commercial property managers can also provide you with advice on legalities and keep things running smoothly on your behalf.

  2. Attract Good Tenants

    One of the best ways of ensuring success for property is by attracting great tenants.. If you choose to hire a property manager, then they'll manage this for you. Otherwise, it's vital to conduct a screening of each tenancy application you receive to guarantee you'll get a good return on investment. Generally, strong corporate or 'blue chip' tenants are a safe and reliable option since they're more likely to be able to meet their rental payments than a start-up with fewer financial resources.

  3. Location, Location, Location

    It's no secret that location is everything when it comes to real estate, whether commercial or residential. When you initially research commercial properties in which to invest, consider its proximity to transport, parking, and other enterprises in the area that could potentially be of use to your tenant's business. You should also research the existing companies nearby to determine whether there'll be an oversaturation of a particular industry in the area.

  4. Be Aware of Maintenance

    Sooner or later, it's inevitable that you'll have to set aside money for your building's maintenance. Whether the electrical system needs an overhaul or the bathrooms need renovating, it's important to factor in your potential outgoings when looking for the perfect investment property. Make sure to do a thorough inspection of the building before you sign off on any papers, and don't be afraid to ask questions. It'll be a waste of your time and money if you decide to invest in a building that'll only drain money from your bank account rather than give you a good return.

  5. Know Your Property

    An investment property isn't just about making money from rent – it's also about capital gain. This is why it's worth looking into how much your property is likely to appreciate in value over time before making your decision. Research other real estate in the area and properties similar to the one you're considering to get an idea of what you can expect. It's also a good idea to read property reports and get a feel for the area's economic and social context. Additionally, make sure to talk to agents – their expertise and knowledge will be a useful resource to you.

Like any investment, commercial property is a risk. However, if you do your research beforehand and approach the matter strategically, you can reap the benefits of significant cash flow, capital gain, and the security of longer leases.

 

This article was written by SmallBizViewpoints from Small Biz Viewpoints and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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