Commercial Real Estate

Ever wanted to know more about owning commercial land and property development? The idea of owning a piece of land that has the potential to provide years of passive income and financial freedom makes commercial real estate a hot commodity. Everyone wants to know how they can acquire a great real estate investment, grow their long term funds, and reap the benefits over the course of a few years. However, not everyone knows how to do it the right way and minimize their potential risk. Many experienced and successful land investors tell newcomers that there are a number of things that need to be evaluated beforepurchasing a piece of vacant land. Let’s walk through important truths you need to know about owning commercial real estate so you can make the best decisions for your future!

Commercial real estate is the way to gain financial income.

Gaining Growth In Real Estate

It’s critical to know some foundational truths about owning vacant pieces of commercial real estate before completely investing your resources. It’s better to be safe than sorry in these matters since you can easily avoid a myriad of problems from knowing what to do and what not to do. Some things to keep in mind while you look at various properties include:

  • Zoning in on the property is critical. Know what the property of your property is by contacting your local planning and zoning department. They can provide you answers to the majority of your questions after understanding what the building’s zoning classification is. This is crucial for differentiating what property is up for grabs for a potential commercial real estate investment and what is best kept for investing in to possible tenants as a private property.
  • The type of land the property is on can affect your future.In many cases, the topography of the land is either flat (ie. in the Midwest), highly mountainous (ie. mainly in western regions) or by the coast. While any kind of building located near a body of water can be extremely valuable, the close proximity poses a wide range of issues. For the same reasons you can’t build a house on an area prone to mudslides, you should be doing some pre-purchase research to discover what is around your property and the history of the land. If it seems to show common signs of nature caused issues your best bet is to stay away. Use Google Earth to zoom in on the potential property to see for yourself!
  • Understand the taxes tied to a commercial real estate property. If you intend to hold onto a property for any length of time, beware of any high taxes in proportion to the property’s actual value. Taxes are highly dependent on the location of the property and the economic climate of the area in general. Successful real estate investors tell new investors that a reasonable annual tax bill typically falls in the range of one to four percent of the property’s full market value.
  • Know everything you can about the utilities of your real estate investment. If a property doesn’t have access to proper gas, electric, or even water, it’s not worth your time. You could lose a huge portion of your profit on doing renovations from plumbers or engineers if you choose to invest in an issue ridden building. Make sure that you check with the former owner about their experience with the real estate investment and do your research on local utility services as well.
  • Understand the zoning restrictions of the real estate investment you have your eyes on. Typically there is a government issued code that will require your property to be built an exact distance from other nearby property lines for protection. Any semi-permanent structures that are included with your property must not cross any of these lines at any point in time. Depending on the size of the real estate investment you are looking at, your size potential could by greatly affected and potentially inhibit your earning power in the situation.
  • Make sure you visit the real estate investment in person before making any important decisions. Sometimes the pictures we see on the internet can be vastly different from what it actually looks like in person. Beware of any scheming property owners and make it a priority to schedule an appointment with them to observe the interior and exterior of the building. If you do happen to live far away from the property, ask a friend or even hire someone to take pictures for you for just an hour. Anyone with a working cell phone camera who can travel to the property and get pictures for you is perfectly fine. In fact, you can post a job ad on Craigslist under the city name of the property to attract a photographer. Depending on how far they are from the location, you usually only have to pay up to fifty to one hundred dollars.

Grow Your Commercial Land Wisely

Being a commercial real estate investor definitely has its wins and drawbacks. Make sure you do all the homework for a property before deciding to purchase it and rent it out to any other businesses. Taking the extra time to learn about the property’s land history, former owner experiences, legal tax rates, zone restrictions, and understanding the true value of its qualities is crucial for your success. Doing so will help you get more educated about what traits make a good land investment and the steps to discover whether the property of your dreams is or not. You never know what the possibilities are until you reach out and ask the right questions! Start taking action on your investment process and start seeing real results.

Commercial real estate can be great if you play your cards right.

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