3 Tips for Beginners in Commercial Real Estate Investment
When entering into commercial real estate investment for the first time, there’s always the potential that you can get in over your head. Thinking too big too early can cause you to make mistakes that can potentially have a negative effect on additional properties that you might invest in. If you’re a first-time investor in commercial real estate, these three tips should help you learn the right steps and establish a basic foundation in commercial real estate.
Take Your Time
When you start investing in commercial real estate, your first instinct might be to build a portfolio by investing in multiple properties right away. But this can have a negative effect on your investments. Investing in one property first and waiting to see how it does before investing in other properties will allow you to make any necessary changes so that any additional investments can be more profitable.
Plan on Upkeep Expenses
No matter what kind of property you purchase, it’s not going to last forever. Things are going to happen or simply need updated that will cost money. To ensure that you are prepared when the time comes that you need to make these expenditures, you should create a long-term financial plan early on that includes these things.
Be Aware of Environmental Concerns
When first investing in commercial real estate, many investors don’t take into consideration the impact that environmental concerns may have on their investment. It’s important to understand that when you purchase a commercial property, you assume responsibility for the cleanup of any hazardous waste issues that may arise. The cost of these cleanups can enter the millions creating a huge problem for your investment plans. To avoid such a situation, make sure you obtain an environmental report so you’re fully aware of any environmental concerns that may affect your investment.
Beginners in commercial real estate investment can make certain mistakes that can damage their portfolio and financial earnings. These three tips will give inexperienced investors a better opportunity to not only have a successful first investment, but will set them up for successful future investments. If you’re looking to invest in commercial real estate or need guidance, come to the professionals at Harkins Commercial Real Estate.
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