Commercial Real Estate 101: Investing in Property

When you set out to invest in property, you know you have a tangible investment on your hands that will last for years. Investment guidelines for new investors can be difficult to understand, but there are a few things to keep in mind when you’re ready to invest in property for the first time.

Understand what it’s going to cost you to own the property.

Remember that while rent from an investment property may be flowing in, you’ll also have expenses that will make money flow out. You’ll need to allow for insurance, cleaning fees, and upkeep on the property when you set your budget.

Have a large down payment.

Investing in property is a sound financial move, but the larger your down payment, the better the move will be. The larger your down payment, the less interest you will pay over time and the sooner your property will begin generating money for you.

Look for a great property manager.

If you don’t have experience in renting commercial property, one of the best things you can do is find someone to manage your property who does have that experience. A good property manager will help find the kinds of tenants you want, take care of background checks, and handle many of the issues associated with maintaining a commercial rental property.

Keep a long-term view.

Remember that, unlike many other types of investments, investing in rental property won’t allow you to pull out ready cash if you need it in a hurry. If the market dips in your area, you might need to sit on that property for quite some time before you’re able to sell. That’s why it’s important to keep a long-term view and realize that it will make you more money over time, if you’re patient.

Be realistic about your ability to fix up a property.

It sounds like a great idea: buy a property at a huge discount so that you can fix it up and rent it out. Unfortunately, the discount isn’t always enough to justify all the work that will have to go into the property–especially if you don’t have the skills to do it yourself. Instead, choose a property that is rental ready, or close to it, so that you can get tenants in the property as soon as possible.

Looking for a property management firm to handle your rental property? Contact us to see if we might be the firm for you.