Investing in commercial real estate is good way of making money. But these investments have to be intelligent and well thought out otherwise you will be risking bankruptcy. Here are some tips which every investor should follow in order to be successful.
The most important is knowledge of the market you will be investing in. Don’t get involved in unfamiliar markets. You can analyze the rate of progress of your investment when you know the trends in the market.
Location is important, but I say in commercial real estate, cash flow is king. Make sure the investment generates enough income to cover the loan and then some..
Don’t be stingy, an inspection and appraisal of entire commercial property is extremely important. You can hire a professional for this purpose as his cost will be easily earned if he advises you to buy the right property or against buying the wrong property.
Be careful when borrowing for your commercial real estate. Make sure the lease income covers the mortgage, and then some.
Always stick to what you know. If you have experience with restaurants, stick to buying restaurants. If you want to venture out into new property types, partner with someone experienced in that property type is recommended