Commercial real estate deals aren’t just for business owners. In fact, many Americans are turning to commercial real estate AS the business in the wake of the Great Recession of 2008. Not only do commercial real estate deals ensure that the work is autonomous, they also guarantee a certain degree of return on the investment throughout the years. And right now could be the best time to ride the commercial real estate train. “According to the Massachusetts Institute of Technology Center for Real Estate, commercial property values fell by 10.6 percent in the fourth quarter of 2008, alone—the biggest price drop since 1984,” reports Investopedia.com.
These times of lower prices “typically reveal genuine investment opportunities,” claims Investopedia, and some investment services companies are ramping up operations to follow suit. “According to a survey by Marcus & Millichap Real Estate Investment Services, of 1,129 commercial property investors, 51 percent planned to increase commercial real estate allocations during the 2008 credit crisis,” reports Investopedia.com. Investopedia has some simple pieces of advice to follow if you’re considering investing in commercial real estate:
- Teach yourself the business. Remember that, “income on commercial real estate is directly related to its usable square footage.”
- Make a plan—do you know where your renters will come from? How much in taxes can you afford?
- Recognize a deal, and work with owners who want to sell
- Evaluate the neighborhood surrounding the property
While much can be said for treading lightly if you’re entering into a new business venture such as commercial real estate, NuWireInvestor.com suggests thinking big. “Dave Lindahl has been quoted as saying, ‘It’s no harder to manage 50 units than it is 10,’” reports NuWire. They recommend looking for a building with at least 10 units, even if it seems like a big project. If you’re going to have to seek commercial financing anyway, it’s worth it to expand your project ideas.
If you or someone you know is considering getting into commercial real estate, the most important step is to contact a business attorney. Don’t go through it alone. Contact The Gierach Law Firm today.