When to Start Working With a Broker
August 2nd, 2013 by Tatyana Levin
Investing in commercial real estate can be extremely lucrative if done correctly. Usually considered to be a long term investment, real estate, specifically commercial real estate, is different from any other type of investment.
Unlike stocks and bonds, you have a certain amount of influence over the value of your investment after you buy it. By upgrading, furnishing, and keeping it looking attractive and presentable, your property’s value can increase over time even more than it naturally.
But before you start shopping for new carpet and painting the walls, you need to understand the basics of commercial real estate investing.
The biggest challenge of investing in commercial real estate is choosing a property. Although finding potential properties is easy when you work with a good commercial real estate broker, choosing between those options and determining which property will be the best fit for you and will have the best returns is significantly more challenging, unless you have the proper guidance.
Yes, you should be able to rely on your commercial broker for help, guidance, and information, but a big part of commercial investing is in your hands.
Keep in mind that the size/square footage of a commercial property directly influences the value of the property. And remember that commercial leases are different from residential leases and tend to be longer which means less trouble finding new occupants and more money.
But before you get to that step, you need to determine what you want, what you’re willing to spend, how much you expect to make, and how much you would earn to make to make your mortgage payments. Money is, after all, the bottom line when it comes to investing.
Once you have certain numbers in your head, then you should start working with a broker and look at properties in your price range. If you start looking at properties before you have narrowed the field down, you’ll be overwhelmed by choices and options.
A good broker will be able to show you different properties in different neighborhoods within your price range and will be able to explain the financial history of neighborhoods and predict their financial futures to some extent.
A broker will guide you through the process, but it is up to you to know what you want and get the ball rolling.