Investing in commercial real estate will never be a risk-free endeavor. Although, there are ways for investors and owners to minimize risk. Many factors go into each commercial real estate transaction, but which ones are the most important to the investor? Usually the investors budget is an important factor, but other factors such as future opportunities can make or break a commercial real estate transaction. Our friends at SVN | Southgate Realty, LLC have outlined the 10 most important factors affecting a commercial real estate transaction.
Buying commercial real estate will always involve risk, but whether you are an investor or owner/user you do your best to assess and mitigate that risk in the pursuit of high returns. So how does one ensure that their asset experiences those high investment returns? While it involves many things like asset and property management, market demand, and price movements, it truly starts at one place: proper due diligence.
In order to decide if a commercial investment is a risk worth taking one must perform ample research and studies on both the property and its market. During this phase, typically completed with the help of a licensed commercial real estate Broker, an investor or owner/user will get a clear picture of the expected returns for their investment.
To get a look into the property performance crystal ball, there are 10 important factors that must be weighed before purchasing any type of commercial real estate. Whether a warehouse or medical office building, to ensure you are making a wise investment choice evaluate the property you wish you purchase against each of the below.
10 Most Important Factors Affecting the Purchase of Commercial Real Estate
Location, location, location! Yes it’s cliché, but it’s true. While a good location is easy to spot, it’s difficult to predict if it will still be a desired spot 10 years from now. We can look into the past to try and predict but unfortunately we can’t see into the future. To make a sound investment choice there are some usage particulars to consider, like:
- Distance from clients, customers, end users and suppliers
- Transportation connectivity required for building use: roads, rail or water.
- Accessibility and ingress/egress
Whether paying cash or using financing, before making any large investment purchase…