If you’ve ever owned a residential property, you’re familiar with the residential real estate market and how it operates. But if you’re looking to expand your portfolio, you need to understand the commercial side of the industry.
Commercial real estate involves land or buildings that focus on selling goods or services and can range anywhere from a single storefront to massive shopping malls.
The commercial real estate industry has evolved over time to include unique opportunities for developers and investors. Its innovation has led many curious investment enthusiasts to look at the industry for opportunities to build their own portfolios.
Finding the right opportunity involves careful planning and execution. In this guide, you’ll find resources and insights to help you navigate the industry and give you the tools to find commercial business opportunities that fit your needs.
1. Determine Your Investment Goals
Before you start browsing for available properties, you’ll want to identify your investment goals. Are you looking to be a silent partner in someone else’s business, or are you interested in becoming both a commercial investor and business owner?
For instance, are you looking to create an affordable commercial space? Then, maybe you’ll be interested in repurposing a shipping container and converting it into a unique commercial space. In that case, find out how much does a shipping container cost to buy to get a better idea of how this option could impact your finances. Choosing a shipping container could be a savvier choice than choosing a traditional brick-and-mortar building.
Understanding your investment goals will help you narrow down your property or land options and ensure you’re putting your money in the right areas.
2. Examine Property Conditions
If you’re looking at purchasing already established buildings rather than a plot of land, you’ll want to examine all facets of the building to determine if it requires any renovations. Is the structure itself sound? Are there any electrical or plumbing issues that need to be resolved?
These questions will help you determine what the overall investment costs would be on your end and will likely factor into your final decision — because the last thing you want is to be in debt before you’re even able to build your business or rent out the space.
3. Consider Current Taxes
Each city and municipality has its own business-related tax conditions. Some cities offer more incentives to investors as a way to encourage business and build their local economy, while other cities with strong economies may have higher price points for new investors.
Working with a commercial real estate agent is key, as they’ll have a clear idea of where your city falls and what makes the most sense for your investment.
4. Identify Needs and Wants
Just as when you’re looking for a new home, investing in commercial properties often comes with the same wants vs. needs distinctions. It can be easy to feel overwhelmed with choices and imagine the final product, but you want to be careful you’re not overextending yourself and your budget.
First, identify the must-haves for your property or piece of land. These essentials include square footage, structural integrity, and factors like parking. If you visit any buildings or plots of land that cannot accommodate your needs, strike it off your list right away.
Something as simple as a scoring system can help you keep track of the spaces you view and help you narrow down your choices to the ones that fit your needs. Your wants can be add-ons as you go through your budget.
Now that you have the basics in place, you can work with your agent to secure your next commercial investment opportunity.