Getting into Real Estate investing is no easy feat. If you plan on investing in Real Estate it’s not something you can just jump into. You’re going to need to do your research and develop an understanding of what exactly to expect. If you feel as if you have an understanding of financial literacy including assets and evaluating what makes a good deal versus a bad deal then keep reading. Here are some crucial tips to consider before committing to a deal for your first commercial property investment or commercial retail space for rent.
1.Develop a Plan
Think of your first Real Estate investment as if you were starting your own business. You were probably taught that a new business is only as good as its business plan. Your Real Estate investment is no different. You as an investor need to pinpoint what you are wanting to achieve with this endeavor. It’s good to establish some short and long term goals which will contribute to helping investors understand your intentions. Setting a goal is not as simple as saying “I want to be rich.” These goals should be specific and achievable. Examples include annual income, property acquisition per year, and rates of return.
2.Understanding the Market
With the world around us constantly changing, it’s important to understand what type of market you are getting into. You should keep track of current events as well as understand what people are willing to spend as well as knowing if the market is currently shifted in your favor. A lot of guides will tell you to predict the market, but we find it’s best to never speculate and understand the know. Invest in numbers where they make sense and you and your bank account will be all the more protected.
3.Concentration
It is best suited to the investor when they develop a specific concentration for a certain market. This includes considering location and types of properties. Rather than becoming a jack of all trades and a master of none, develop a specific niche that requires you to know the ins and outs of all the specifics for your chosen focus.
4.Invest in Cash Flow
Especially if this is your first dance with the Real Estate business make sure you are investing into a commercial property that will guarantee a cash flow return. For the more experienced investors, it sometimes makes sense to invest in property that produces a negative return or even one that allows the investor to break-even, but for you rookie investors, that’s for later down the line.
5.Leveraging Your Investment
One of the beneficial aspects of Real Investing compared to other forms of investing is that investing in Real Estate is the only investment that allows you to borrow other people’s money to purchase a property that produces income. By doing this you will have more room to take your earnings and leverage your earnings into more property investments.
If you are still here and haven’t been scared away, you should be proud of yourself. . Anyone can earn a return on short term investing, but what separates those people from the long term earners is a lack of understanding of basic principals or refusing to take all the steps needed to be successful in Real Estate long term.
It is important to rely on a real estate agent that has the best experience with commercial real estate. Get in touch with Cardinal Realty Group, an established industry leader with more than 35 years of commercial real estate experience. Call 636.225.0385 or send an email at Hal(at)CardinalRealtyGroup(dotted)com.