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Learn What the Insiders Know To be a player in commercial real estate, learn to think like a professional. For example, know that commercial property is valued differently than residential property. Income on commercial real estate is directly related to its usable square footage. That’ s not the case with individual homes. You’ ll also see a bigger cash flow with commercial property. The math is simple: you’ ll earn more income on multifamily dwellings, for instance, than on a single-family home. Also, know that commercial property leases are longer than on single-family residences. This solidifies a longer commitment to an expected cash flow.
Map Out a Plan of Action Setting parameters is a top priority in a commercial real estate deal. How much can you afford to pay? How much do you expect to make on the deal? Who are the key players? How many tenants are already on board and paying rent? How much rental space do you need to fill?
Look for a Catalyst One sign that an area is up-and-coming and that it will be desirable in the future is the development of new infrastructure. When you see new roads and schools being built, it can be a sign that the community is set for a growth spurt. Investing in a growing community can be very profitable. In addition, certain types of development, like new shopping centers, may be extremely attractive to homebuyers. Spotting new developments can be as easy as looking out your car window as you drive by. For example, a property in an up-and-coming area with high traffic could be the perfect place for a Starbucks or other chain restaurant. Telltale signs of land clearing, surveying or the beginnings of construction in and around major roadways are pretty big tip-offs. Also, look for widening of traffic lanes, the installation of turnaround lanes and the erection of new traffic lights. These may all suggest the possibility of increased traffic flow.
Are you in the market for commercial real estate? Check out the listings on the following pages and get your cash flow started today!
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