Real estate has an extensive history as a great investment. You may have your sights set on a commercial real estate investment rather than a residential property. How prepared do you feel?
To help, The Motley Fool’s Millionacres offers commercial real estate investing insights. Ensure that you feel ready to take the plunge.
Understand supply and demand
Do some digging into Massachusetts’s current level of supply and demand for whatever commercial property that interests you. While the business type could be popular, that demand may not be as robust in your geographic area. At the opposite end of the spectrum, the business type could be a bit too popular in your area right now, giving you that much more competition to contend with.
Learn property type
Pay close attention to the type of property you want to invest in, such as retail, self-storage, hotel or special purpose. To spread some of the risk you take as an investor, consider properties with multiple tenants.
Think about market cycles
Examine market cycles before spending time and money on a commercial property. Current events affected some business sectors and property types more deeply than others, and that could continue for the foreseeable future. Try to get a bead on how this shift impacts future cycles, so you can get ahead of the game rather than play catch-up.
Plan for hard times
Current events also demonstrate the importance of planning for hard times. While budgeting for your investment, factor in a capital reserve and contingency fund. Even after making your investment, continue contributing to your fund.
Get a full lay of the commercial real estate land. Legal and business professionals can help flesh out your investment strategy.