Commercial properties form up an important part of our real estate industry and they’ve a significant impact on driving the economy. Start of a successful investment in commercial real estate is by understanding the broad and complex market factors at work, financial requisites, leasing arrangements, property management choices and firm grasp over potential risks.
Have a clear idea of the property type you wish investing in and research is the key to proceed on track. There’re number of different market trends worth considering and looking into these factors would help you choose between commercial properties be it retail, industrial or purely business oriented!
Property Management – 10 steps to ace commercial property investment
Step 1
For the first time commercial property investor, an ideal start is considering small industrial lock-ups or starter units ranging from 500 to 1,500 square feet. Although these particular types of real estate don’t promise much, they do offer handsome returns and are much easier to let. Agents and receivers are the best research sources to begin with!
Step 2
Know where you’re about to invest! Go beyond the premises in your locality as investment may give the best output elsewhere, other than the usual neighbourhood.
Step 3
Identify potential risk levels especially recession as it has a huge impact on commercial properties leaving shops at the mercy of economic flux; quite risky for first-time investors. Newbies should first consider safer options that can be travel lodges, premier inns and supermarket chains. Most of these chains and franchises have expert agents to entertain queries in a professional way so they’re always good to approach for enthusiastic investors.
Step 4
Conversions are always good and expert investors who purchased bigger sheds converted them into smaller units. Such projects generate more profit from the outset as they usually require car parking, turning points and other facilities that’s possible only through appropriate planning. Real-time implementation may be time taking but there’re above 90 percent chances of sound investment returns for years to come.
Step 5
Employ a planning consultant to gain permission and the first meeting would definitely give you an idea if there’re any chances of returns whatsoever!
Step 6
Collaborative approach is much preferred if it’s the first time you’re investing in commercial properties. This is because of the many options and shared investment pool whereas you’ll discover the market in a secure way. Split investment between collaborators means sharing risks and rewards. Reach out through social media to attract potential investors and to conduct your research.
Step 7
Make a checklist and stick to it! This is crucial when you’re visiting different investment sites. Do keep your eyes open for factors such as immediate turning points, delivery ground, accessibility, sewage facilities in each unit, height of the construct and eaves. Determine if the building is high enough for an additional mezzanine and keep climate factors under consideration as well.
Step 8
Details; both internal and external to that of commercial properties is extremely important as they form the basis of primary investment. Upon landing on just the unit you’ve been looking for, dedicate some time to understand terms, conditions and even the smallest details that may inflict investment. Consider the reason property would be used for and if any particular insurance is needed.
Step 9
Make sure you complete legal searches and inquiries are being done carefully. Also know about the purchase cost if it’s subjected to VAT and capital allowance advice. A legal advisor would be a great help here who can help you steer throughout the process all the way to the end.
Step 10
Most successful investors we see today are ambitious and have a foresight to move in the right direction.
Conclusion
According to one property management company in Dubai, anybody can ace commercial property investment and take it to the next level if it adapts all the attributes explained above.
Author – Ayda Jamar
I am a kind of person who thinks a lot, read and write on different genres of topics to satisfy my own quest of finding answers against different twisted scenarios. Real estate is my favorite area of writing, I have been in digital real estate for a while and currently holds a position of Senior Executive in a property management company in UAE.
