An intelligent investment decision doesn’t lie only in the outside beauty of the investment. You cannot just invest a large amount of money if the property pleases your eyes.
Investment is much more than that! It is a time-taking decision involving analyzing of the terms, the complete deal and the return on investment factor. It can be confusing sometimes to take such decisions with the risk factor and fluctuating rates involved. And therefore, you cannot go with the hit and trial method every time. There have to be some tried and tested ways to help you make the commercial investment decision in real estate easier.
Here are some easy tips to be kept in mind for a successful commercial investment in real estate –
• One thing at a time, as elder people advice! – This is specifically for people who are investing for the first time. And even if you are not a first-timer, then also follow this. Concentrate on just one kind of investment, whether it’s a flat, office or retail space, land etc. This is because if you focus on more than one investment at a time then your mind can become cluttered and confused. This will ultimately affect your decision and will lead you to having a just average property. Each and every investment needs sufficient amount of time and attention of yours which, if divided among others, is not beneficial.
• Focus on being a proper investor – Why do we make commercial investments? The answer is very simple, to earn returns in the form of profits from it. But investing in commercial real estate would be futile if it doesn’t yield any income. In such cases, there is no investment taking place, you are simply buying a property.
• Be it any field, you need mentors – Mentors are like the human form of “Rules Manual” you always want while starting a task! And making investment is no less than a big TASK! Mentors can guide you throughout to prevent you from making mistakes, notice when you have missed something and can even introduce you to certain useful resources which you wouldn’t have known otherwise.
• Focus on the term “LIFE” – When you buy a house for your own residential purpose or even when you buy a car, you are prepared for all the maintenance costs that come along with it in the future. Then why not being prepared for these costs even in the case of investments? Very few things in the world are immortal, buildings not being one of them! Buildings have a lifetime and then you will to bear its maintenance like changing the roof, getting it painted again or maybe getting the system of wires changed. Make long-term plans and then make commercial investment.
• Try to get a non-recourse loan when in partnership – Firstly, what does non-recourse mean? It means that you are not becoming a personal guarantor of the loan. Therefore, if the partnership ends, you would be taken off the loan. Also, if the property turns out unsuccessful, you personally won’t be liable for it.
• Always consider the environment – When investing in commercial property, it is mandatory to keep in the mind the costs of hazardous wastes problems attached to it. The owner has the core responsibility of funding the costs of these problems, even though maybe, he didn’t cause them.
• Analyze the protected status of the property – Legal Disputes don’t wait for anybody’s convenience. And that is why you need to be constantly protected from the same. Keep in mind these certain questions to be answered –
1. To what extent is your property protected?
2. Are all investments separate from each other? Because one legal dispute can interfere with the other.
3. What will you lose if you actually lose the dispute?
These important questions should be taken seriously and should not be based on assumptions. Therefore, you should consult a professional lawyer to protect your property.