The idea of commercial estate investing can be intimidating for any beginner because it requires a heavy time and monetary investment. Surveying properties across locations without any prior know-how about the CRE industry can be tough for a lone individual.
If you are new to the world of commercial estate investing, you need this beginner’s guide to help you get started.
Identify Your Purpose
Your purpose should be clear before making a commercial investment. It can vary from anything between diversifying your portfolio, exploring extra income opportunities, or investment for the future for retirement earnings
Research, Research, Research
Thorough research is required to understand the world of commercial investing. It facilitates better decision-making and risk-avoidance.
Start by researching the internet and explore the area on your own. Go through real estate blogs, articles, and videos to learn about CRE investment strategies.
Research popular locations for investing in real estate and study emerging markets to analyze their commercial potential in the present and future. This will help you decide whether investing there is beneficial or not.
Join real estate forums on social media to initiate a conversation with previous buyers, current investors, and real estate agents.
Talk to Multiple Real Estate Agents
Network with different agents and people experienced in CRE investments. They can provide you a detailed overview of commercial properties and the industry in general. Schedule a meeting with at least 3-4 different real estate developers before hiring or working with anyone.
Get Recommendations
Getting recommendations from trusted people always helps. Try to get suggestions about locations, properties, and real estate agents from people you know, like your family members, close friends, or colleagues. If possible, get detailed feedback about their experience and ask them what do they wish they had done differently while investing in a commercial property.
Financial Planning
This is the most important aspect of any type of investing. The idea of generating income through properties is exciting but one wrong decision can take a toll on your finances. Hence, it is important to consider if you are really financially ready to make a commercial investment.
Also, explore your loan and mortgage options with your real estate developer to find out about the rate of interest, hidden costs, and expected returns on investment.