Commercial real estate strategies you should learn 

1. Research the neighbourhood you want to invest in

Before considering an area or property to invest in, it’s best to look into the economic conditions of that location. Is the occupancy rate in the area high? Are there many vacant commercial properties? Find answers to these questions to understand the supply and demand factors for the commercial property type you’re interested in. Don’t forget to research the demographics of the area, as well as the market forecast of the neighbourhood.

2. Select the right commercial property type  

The financial prospects of investing in commercial property are very inviting. But, it’s crucial to find the right commercial property to reach your investment goals. The property type you choose could be an office building, industrial warehouse, retail space, or a multi-storey complex—but it needs to align with your investment objectives. So, consider important factors such as location, appreciation potential, tenant base and market outlook.

3. Analyse your potential returns  

Before you close a deal on a commercial property, it’s important to assess the financial opportunities or risks of your choice. First, ensure that any building defects or renovations required on the property don’t have to be done by you. Conduct a thorough financial assessment, including potential operating expenses, such as property management, taxes, insurance, and maintenance. Also, calculate potential returns, including capital growth. 

4. Conduct a thorough risk analysis

Owning a commercial property won’t be all peaches and cream. There are factors beyond your control that could put you in a tough spot financially. So, consider factors such as tenant turnover, economic uncertainty and potential environmental or legal issues. Are you financially secure enough to overcome these issues? If not, consider diversifying your commercial property portfolio to spread risk across different property types and locations.