Search and Assess: The Two-Way Commercial Real Property Investment Strategy
Sunday, October 11th, 2009
Chris B. Jenkins asked:
Everyone you know seems to be getting into the real property investment bandwagon. Their prospects for revenues seem bright, and you are almost tempted to get into real property investment yourself. Only, you need to be convinced some more.
It is a good thing to take your time in deciding whether or not to go into real property investment, especially so if you are eyeing commercial property investment. Investing in commercial property often entails bigger investment costs and higher risks. The secret to a successful real property investment venture is to know the property that you intend to purchase, and to make sure that the risks are low, and the prospects of earning are high. You can do this if you know how or where to look for commercial properties that you can invest in, and how to assess their viability.
The first step is to look for—and find—a good commercial property to buy. If you have been complaining about not finding a promising property after driving around your block or your neighborhood, you are missing the point. The meaning of “searching” means you have to go out of your way to find commercial properties that you can invest in. The Internet is the best place to start your search. It is more convenient and less costly as well, considering that it lets you go places while staying in your couch or desk. There are several websites out there that regularly posts available investment properties from different states, whether urban or rural. There are also the newspaper classified ads, but experts say the Internet is a better search tool.
If you don’t find anything promising to start your commercial property investment venture with, you can also drive out of your neighborhood and around your immediate localities to sniff around for properties. Be especially observant of any abandoned properties that you pass by, as these most often turn out to be the best buys. If you do find any property with potential for commercial use, you may want to set a preliminary meeting with the owner to see if he is open to selling it. There are others also who resist the urge to ask a real estate agent for advice. Expert investors do this a lot, especially those who are admittedly not experts in the matter of real estate. A real estate can do a lot of great things for you, such as help you look for promising properties, or compare your prospective property investments.
Once you have found what looks like a good investment, it is now time to assess and see if it is really a smart move to purchase the property. For this purpose, you need to look at your expectations for the commercial property, looking at it as an investment rather than a piece of property that you would like to own forever. How many returns do you expect it to generate? This is called the quantitative approach. Then follow through with the qualitative approach, this time assessing whether or not your goals are realistic, given the amount of time, commitment and money that the investment requires. If it appears that this is something that is feasible for you, then you are ready to sign on the dotted line.
Everyone you know seems to be getting into the real property investment bandwagon. Their prospects for revenues seem bright, and you are almost tempted to get into real property investment yourself. Only, you need to be convinced some more.
It is a good thing to take your time in deciding whether or not to go into real property investment, especially so if you are eyeing commercial property investment. Investing in commercial property often entails bigger investment costs and higher risks. The secret to a successful real property investment venture is to know the property that you intend to purchase, and to make sure that the risks are low, and the prospects of earning are high. You can do this if you know how or where to look for commercial properties that you can invest in, and how to assess their viability.
The first step is to look for—and find—a good commercial property to buy. If you have been complaining about not finding a promising property after driving around your block or your neighborhood, you are missing the point. The meaning of “searching” means you have to go out of your way to find commercial properties that you can invest in. The Internet is the best place to start your search. It is more convenient and less costly as well, considering that it lets you go places while staying in your couch or desk. There are several websites out there that regularly posts available investment properties from different states, whether urban or rural. There are also the newspaper classified ads, but experts say the Internet is a better search tool.
If you don’t find anything promising to start your commercial property investment venture with, you can also drive out of your neighborhood and around your immediate localities to sniff around for properties. Be especially observant of any abandoned properties that you pass by, as these most often turn out to be the best buys. If you do find any property with potential for commercial use, you may want to set a preliminary meeting with the owner to see if he is open to selling it. There are others also who resist the urge to ask a real estate agent for advice. Expert investors do this a lot, especially those who are admittedly not experts in the matter of real estate. A real estate can do a lot of great things for you, such as help you look for promising properties, or compare your prospective property investments.
Once you have found what looks like a good investment, it is now time to assess and see if it is really a smart move to purchase the property. For this purpose, you need to look at your expectations for the commercial property, looking at it as an investment rather than a piece of property that you would like to own forever. How many returns do you expect it to generate? This is called the quantitative approach. Then follow through with the qualitative approach, this time assessing whether or not your goals are realistic, given the amount of time, commitment and money that the investment requires. If it appears that this is something that is feasible for you, then you are ready to sign on the dotted line.