Commercial real estate investment can be a rewarding venture. Done right, this can be a great source of income even during shaky economic times.
However, mistakes do happen. And some can be quite costly. Here are costly mistakes that you need to steer clear of when investing in commercial real estate:
Overlooking the location of the property
The choice of location can make or break your commercial real estate investment dream. Before investing in any property, it is important that you evaluate the quality of the properties in the location. Next, you need to understand how the location will impact your property’s long-term value.
For instance, if you have an office space in a gang-controlled, and thus-crime prone area, then you may have difficulty finding tenants, and this means that your investment could sit empty for quite some time.
A commercial property ought to satisfy all the crucial requirements of the intended tenants. And location, access and zoning are key factors that will determine your investment’s ability to attract potential renters.
Overlooking applicable laws and regulations
While this may seem straightforward, it is not uncommon for some investors to make the mistake of failing to do their homework before closing the deal. Before investing in any commercial property, be sure to review whether it meets the state’s zoning regulations. Additionally, be sure to evaluate any existing and planned developments in the area and understand how they will affect your investment in the future.
Investing in commercial real estate is a huge undertaking that can yield great returns if you get it right. Find out how you can protect your rights and interests while investing in commercial real estate.