Commercial property is a worthy investment, but one that needs to be researched, studied, and managed to make a profitable return. Here is what you need to know about commercial property investing"
The Legal Stuff
Before getting too far in your property investment research, you should look into all the applicable local laws, and hire a business attorney who can help navigate the often abstract and confusing laws. Make sure to work with a lawyer who is familiar with the local laws in the place where you plan to invest in property, since the laws sometimes differ from one state to another.
Having a good attorney who can explain and handle the laws, as well as the contract is vital to a successful investment. This is one area where you need to spend a lot of time and resources!
Show Me the Money
You can base your projected income on current trends and future projections, however you need to be sure that the value of the property will appreciate. When and if you decide to sell, you will want to get more than you paid for it.
You need to look at the different ways the property can be an income generator. Look at how the property is zoned, the location, other rules and regulations regarding the specific purpose that the land can be used for. Remember, when buying commercial land for your business, ensure that you will legally be able to use the land for the intended purpose.
If you are like most people, you don't have all the capital necessary to invest in commercial property, and will probably need a commercial property loan. You will need a lot of documentation to apply for this loan so put together all information on your business operations, your financial status and estimated earning potential and the property title deed. The lender wants to make sure they are making a good investment too!
When calculating cost for any particular property, don't forget fees payable to any professionals you may have hired as consultants to close the deal, any registration or other legal expenses to be paid. These expenses tend to amount to quite a bit, and therefore should be budgeted when calculating the feasibility of a property.
Don't be afraid to shop around before choosing a piece of property. The first may not be the best and it is better to do the extra legwork now, then be wrong later!
In order to protect your investment once it has been made, contract with a reputable local property management company. This company can handle the day to day operations, the tenant negotiations, maintenance, etc. Not only increasing your possible ongoing incoming income, but the property value itself.
Investing in commercial property is a proven way to grow your money, but not everyone can successful. Be sure to take the necessary steps before, during and after in order to ensure a long term positive investment.