5 tips for investing in commercial real estate - The Coto Group

5 tips for investing in commercial real estate

If you’re looking to invest in real estate, you want a property that is reliably profitable, has low risk and, ideally, helps you curb how much you spend due to inflation and taxes. You can accomplish all of this and more investing in commercial real estate. Be it retail, industrial or office property, these investments can be more costly than residential real estate, but there are great benefits to be gained! Here are some tips:

1 – STUDY THE MARKET

Commercial real estate can house activity in all levels of the economy, so doing your homework is vital! Research usual market value and lease rates, local economic activity, and even transportation routes and accessibility to the public. Keeping up with national economic trends and news is also a very good idea.

2 – MIND THE CONSTRUCTION

Building-wise, you want a recent property that doesn’t need a lot of renovations but has great potential for development. You also want a place with a flexible design you can adapt to the activity of your tenants; you don’t want to be stuck with a big beautiful building that doesn’t really work for their business needs!

3 – MANAGE THE TENANT SITUATION

In general, tenants of commercial real estate tend to maintain and fix a lot of problems that a residential tenant would just throw at you, the owner. Also, leases for commercial tenants are usually longer; what you want is to purchase a property with an already long-standing tenant.

4 – PAY ATTENTION TO THE FINANCES

Commercial real estate offers substantial tax benefits, and the success of the business taking place within can help the valuation of the property. However, there are many complexities to the finances of managing commercial real estate: loans usually have higher interest rates than for residential properties, and you have to plan your lease structure carefully. It’s best to get the help of an expert and invest safely.

5 – GET THE HELP OF AN EXPERT

There are many moving parts in investing in commercial real estate. Get the help of a financial advisor and a trustworthy real estate agent to make sure you’re purchasing the right property, and also managing it correctly. An agent can also help you find new tenants and manage your relationship with them. Additionally, there are some legal concerns, licenses and permits, that an expert can help you sort out so you don’t accidentally break the law.

If you need the help of a real estate agent contact us at The Coto Group, at our phone numbers (305.422.9286 / 305.803.3059), and follow us on social media @TheCotoGroup to know more about real estate all over Key Biscayne and Brickell. With over three decades of real estate experience, The Coto Group will solve all your real estate needs.

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