Quick and Useful Facts About Commercial Real Estate
Are you planning to invest in commercial real estate? If you are just getting started in the real estate investment world, you might be seeking simple, useful facts to help you get started. The following details should help you understand the basics of how this field works and how you may be able to maximize the likely return on the investments you make.
Cash Flow
When planning real estate purchases, you will need to consider likely cash flow. The cash flow you expect or require from your investment may vary based on your situation. If you need to feel confident in a consistent return, consider seeking a property type that is likely to provide excellent cash flow. An apartment building could be a good place to start.
Property Types
Before investing in commercial properties, you probably should research the varieties that are available. The type of land you choose might impact many aspects, from cash flow to lease type to available financing and beyond. Whether you are thinking about investing in a shopping mall, an apartment complex or a warehouse, consider first researching likely pros and cons. Potentially helpful sources of information could include reputable websites, contacts within the commercial real estate world, and more.
Lease Varieties
When thinking through your options, also make sure you consider the lease varieties that are available. The lease on an apartment complex may be different from the lease on an office building, retail center or hotel. Some investors prefer triple net leases because the tenant generally covers expenses such as insurance, maintenance, taxes and more. A triple net lease also may allow you to incorporate planned, consistent rent increases to help ensure that your cash flow will remain healthy in the future.
Experience Levels
Before you choose the type of property you will invest in, try to consider your own experience level. What types of projects do you feel most comfortable handling? While a hotel or resort may look appealing to a first-time investor, these properties can be complex and might require a bit more experience. Land development is another type of real estate investment that might not be ideal for a beginner. If you are going to tackle a complicated real estate project early on, try to ensure that you have an experienced partner or advisor who can help you make the right choices.
If you plan to invest in commercial real estate, you will want to do everything you can to maximize your chances of success. To this end, consider first doing due research on things such as lease types, property varieties and more.
