Location, cost, property type, size – the list goes on and on. There are many variables to consider when investing in commercial real estate, especially for a first time buyer. For someone who is new to real estate investments, it might be difficult or even intimidating to decide which properties to consider as candidates to buy. This is understandable; there will be lots of questions on your mind. One of the questions will inevitably be: in what property type should I invest? We focus on this because once you decide on what type of property to finance, it is easier to narrow your search.
There are many property types to consider, including: office, creative office, retail, industrial, multifamily, industrial and hospitality. In reality, there is no best property type to invest for beginners per se. What you decide to invest in depends on three factors: what you are comfortable with, what your goals are and what area you want to invest in. For example, many first-timers may consider multifamily at first because they were at, one time, apartment dwellers and know the ins and outs of living in an apartment. They know the good & bad, such as how to be a respectful tenant (hopefully) and how to handle a leaky faucet, etc. Now they assume they are able to deal with the issues as a property owner. This logic may or may not turn out to work in their favor, as a tenant POV is different than an owner POV. Another example is a restaurant owner turned first time investor. He has experience in retail and restaurant industry so logically (for him) decides to invest his savings in a retail property. Additionally, retail and industrial might be good for investors who want safe, corporate guaranteed tenants.
You should also consider what your goals are when deciding to invest in commercial property for the first time. For instance, are you investing for the short-term (<7 years) or for the long-term (7+ years)? They require different ways of thinking – one property type may be better to invest in the short-term, whereas another property type may be better to keep for a longer period of time. Location is important as well. You want to invest in an area where your property type will perform well.
A broker should be able to advise you on the asset classes that are best suited to match your needs / goals. If you need guidance regarding what investment is right for you, Commercial Brokers International can help direct you in the right direction. Contact us by going to our website at www.cbicommercial.com or by calling us at (310) 943-8530. Realize your commercial real estate investment goals today!
Note: Consult your lawyer before investing in real estate. While helpful, this article and/or any online research should not be used as your only source of investment advice.