Rhode Island is full of commercial real estate potential. With downtown Providence seeing an overhaul, there are plenty of opportunities for experienced and new commercial real estate investors.
Commercial real estate can be a complicated process, but the benefits and potential revenue can be well worth the time. So, if you are thinking about breaking into the world of commercial real estate, we have a few tips to get you started and on the path to real estate success!
#1 Do Your Research
Research will be a major part of your commercial real estate venture. To start you will need to take a look at locations. Typically properties located close to hospitals, colleges or downtown areas will have a better value. This doesn’t mean it has to be a requirement, but it is something to consider when scoping out potential properties.
Once you have a general location or neighborhood narrowed down, you will want to start looking at other commercial properties in the area and start filling in answers to these questions below.
- How much do commercial properties typically sell for in the area?
- How much income could you potentially bring in yearly in this location?
- What do taxes look like in this area?
- Are there any major developments happening in the neighborhood?
By answering these questions you will have a better understanding of the location you are looking to invest in, and will know if the particular area is a good fit for your investment profile.
#2 Find a Niche
When you are new to commercial real estate investment, it is important to take one property at a time and to find your niche. Whether you have interest in office space or land, the more you research and understand a particular type of commercial real estate, the better your decisions and deals will be. This doesn’t mean you need to stick to one bracket forever, but as you are learning the ropes, it will help you keep your focus in order to choose the best opportunities.
#3 Make a Long-Term Plan
Every real estate venture has a lifetime, including your commercial property investment. Major repairs and building upkeep should all be factored into your long-term plan. When looking at potential properties, be sure to ask questions and have a general outline of when big ticket items like roofing and electrical will need to be repaired.
If you have a property that needs a ton of work in order to meet new building codes, you may want to consider a property that requires less up front cost for your first endeavor.
#4 Narrow Down Financing Options
Having your finances in order will help move along your commercial investment process. You will want to do your research and see what kind of interest rate you will be looking at and which banks/credit unions you could potentially utilize.
Additionally, it will be important for you to become familiar with a few commercial financing terms, including but not limited to cash-on-cash, seller carry back and subject-to. The more knowledge you have when it comes to financing, the more educated your decisions will be.
#5 Find an Experienced Commercial Realtor
Although we may be a biased, the most important aspect of your commercial real estate investment will be the realtor you choose to work with. Their vast knowledge of the industry and process will be essential to your decision-making process.
As a local commercial realtor, they will know locations and their potential profitability better than anyone. Online research will only get you so far, which is why it is important to hire a local realtor who is familiar with other commercial properties in your area of interest.
Taking the first step into commercial real estate might be intimidating, but the long-term value will be worth it. We welcome you to get in touch with the Next Move Realty Team about your real estate endeavors. Our experience is your advantage, and our goal is to create clients for life.
“Our Experience is the Difference and our goal is to Create Clients For Life!”
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