5 Investment Tips for Commercial Real Estate

An investment in commercial real estate is a great way of increasing your market worth. Also, by acquiring the asset you add a steady source of earnings to your portfolio. Commercial property that is strategically located can appreciate dramatically over a period of time, while rented commercial properties can procure a regular cash flow for other financial pursuits like investment or for comfortable retirement. The following are five useful tips that will help you while purchasing a commercial property.

• Learn from experiences 

It is always good to go with your instincts. Make use of personal knowledge as the best ideas for investment come from the investor's prior investment experiences and know-how. You should search for real estate in an area located close to your home or some place that is known to you. Investing in familiar markets is always a safer option and you can trust your instincts about what to buy where. Start going through blueprints and get a potential property evaluated. Remember to park your hard-earned money in a well-established locality, rather than an upcoming one even though it would cost more. It is going to be a more profitable investment eventually.

• Wait for the right opportunity 

If you have just seen the property once and have decided to seal the deal, probably you are rushing in a bit too soon. Do not make such a blunder just because you have the purchasing power or like the look of the place. That does not mean the property is ready to be acquired. You should be comfortable with the area and the property. Visit the real estate during all times of the day to see the amount of lighting and the noise in the vicinity. Recce of the real estate may probably even bring out a few flaws in the property that can later be used to negotiate the price.

• Build a real estate circle

An investor seeking to buy a commercial property cannot strike the best deal without a few suggestions and strategies from friends or experts from the real estate network. If you have a business associate from the legal, banking, contracting or property sales profession whose opinion you can trust, you should probably get some professional advice before taking the plunge. The person may also help you find a better deal.

• Plan for both short and long term prospects

As an investor of commercial property, you should be able to gauge the immediate outcome from your investment, while also understanding its long term effects. Cities and their suburbs consist of several run down properties that were once buzzing. Draw your plans and cross-check what you want with what is available. Sometimes, changes in infrastructure, transportation routes and arrival of big organizations in the vicinity can instantly boost the worth of real estate. If something like that is on the cards for the property you are considering, you may be in for success in the near future.

• Diversify your portfolio

Do not risk your money by parking all your funds at one place. You may be taking a huge risk by putting all your investment into a single commercial property. While buying commercial real estate and renting it out will ensure decent cash flow at a later stage, a market slowdown during retirement would be ruinous. Commercial property must not be the only one holding for an investor. To avoid getting stuck with a fruitless investment, it is advisable that you diversify by purchasing residential real estate or stock. If you are only inclined towards venturing into the realty sector, you can branch out by acquiring space in retail or office buildings, apartment buildings, condominiums, studio flats or by buying raw land.


This is a guest post by Devika Arora. The above piece of work talks about commercial properties in India.