Commercial real estate is property leased to business owners rather than residential families. The initial investment on commercial property is often high, but the returns can be far greater than residential real estate. An investor must evaluate the property based upon location, economy, and the risk of repairs versus the possible lease amount.Does this Spark an idea?
Instructions
Contact a real estate broker and determine the best locations to scout commercial real estate. Select a location with few vacancies and a good balance between residential structures and major shipping lanes such as highways.
Hire a contractor to examine the property inside and out, making note of any damage that needs repairs. Tally the list against what the broker believes you could get from leasing the property to a business owner.
Invest your personal time in the area, monitoring the local businesses to see how they are performing. Make the commute from residential areas to the commercial district to determine if the property is easily accessible. Weigh these findings in your decision to purchase the property.
Consult with your broker and determine a threshold price that you are willing to pay but not exceed, keeping any repairs in mind. Arrange a meeting with the seller and attempt to purchase the property below your threshold.
Tips & Warnings
• The best way to know if a commercial property will perform well is to evaluate the businesses nearby.
• Always have someone check the property for asbestos or lead paint.
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