Property investment is a line of work that’s helped many people become wealthy and secure. However, it’s not an easy industry to jump into and succeed – you need a good strategy and a comprehensive plan so that you can make calculated moves with minimal risk. Here are five important dos and don’ts of investing in commercial real estate:
- Do – Plan Before You Invest
It sounds like obvious advice, but one of the most common pitfalls commercial real estate agents see with new property investors is that they jump at attractive opportunities without considering whether it fits with their overall investment strategy. This can be costly because the property might require extensive modifications to get where you want it to be. And that’s the best-case scenario. Worst case scenario? The property isn’t able to be retrofitted into your plan, and you end up with a very expensive mistake on your hands. So, be sure to create your plan around the property rather than trying to make it fit with your pre-existing ideas.
- Do – Remember, Slow And Steady Wins The Race
There’s a lot of misleading hype around property investment. It’s not a get-rich-quick shortcut to the top. The yields are long-term and cumulative, and you’ll need guidance from property investment professionals who have experience in managing a portfolio. You will need to diversify your investments and construct a strategy containing your risk assessment and all of your projections.
- Do – Your Research
Property research has to go beyond what you’ve heard from the estate agent about the region and the property you’re interested in. For a comprehensive understanding of the situation you’re getting yourself in for, you will have to dig deeper. If you’re bidding at an auction, you might need to seek legal advice first. This can help you to avoid uncertainty regarding purchasing entities (a subject that can bring about some seriously stressful phone calls to legal teams at the last minute if you’re not careful).
- Don’t – Bid Until You Have The Finances Available
Auctions are often gold mines for fantastic properties at low rates. Provided the competition isn’t too steep, you can often get a great foot in the door with property investment by visiting auctions. The best piece of advice experienced property investors can give inexperienced bidders who are trying to break into the industry? Don’t bid until you have the money you’re willing to spend in your bank account.
Don’t rely on a loan, especially if you’re investing in commercial property. The loan terms can vary greatly, and they tend to be based on your asset bracket. If you’re acquiring property through an auction, have the money ready in your account to ensure a smooth and stress-free transaction.
- Don’t – Buy Until You Have Consulted With Professionals
Another common mistake new investors make is to jump into a sale without doing the necessary research, and without understanding the sales process or the property market. Instead, they rely on money from a previous sale before it’s even come through.
Always wait for the money to be in the bank before you buy. It’s a good idea to acquaint yourself with the industry before you start making offers. Speak to property consultants and investment professionals to help you set up a plan that fits in with your goals.
Remember, property investment is not an overnight money-maker. Consulting with investment professionals who specialize in commercial real estate will help set you off on a pathway to success.