5 Myths about Investing in Commercial Property

Commercial real estate represents an incredibly valuable and attractive investment opportunity. Yet for many first-time or new investors, commercial real estate investing is surrounded by many misunderstandings.

Whether looking for an office space for rent or a commercial property for sale, here are five myths in the commercial real estate market that may be helpful for those looking for commercial properties.

Myth 1: Good deals are difficult to find 

No matter the market situation it will always be possible to find a good deal in the real estate market, there are always certain types of properties and other factors that make this reality a possibility. All this is dependent on you making a reasonable effort to make the deal happen though. There are property sites out there where you can do a significant amount of research as well as finding a good real estate advisor. If you dig and put in the work, you will find them!

Myth 2: Inspections are a waste of time

Property inspections are indeed important to properly shortlist and then to finalize the right properties. Many clients complain going out with realtors and spending hours and hours seeing places over many days to no avail. It’s important to find a commercial property site that has verified pictures, videos etc... so that you can properly shortlist the right office spaces! And then take it from there. If go directly through a realtor, ask them to send you pictures of the properties first.

Myth 3: Commercial real estate investing is risky

All investments carry a certain level of risk. Commercial real estate is no different. There’s an element of risk with almost all investments and just like other investments you can minimise and manage your risk by undertaking due diligence. Through research, you can identify companies which undertake risk assessments at critical decision points during the investment process to manage risks and target returns.

Myth 4: Needs lot of cash

Some non-residential property such as industrial assets can be expensive, but that’s not the case for all non-residential investments. Property that includes offices or serviced apartments that are strategically located are generally considered good investments as they are high in demand. Proximity to business centres, transportation and access to roads are qualities that add to the asset’s value. Even the most seasoned investor sometimes invest small at first to ‘test the water’ and on the sign of good returns, increase their investment by putting more money or by using the principle of compound interest.

Myth 5: Renting is always best. No, wait, buying is always best!

Everyone has a different perspective and the decision to buy or rent commercial space should depend upon your business needs. So while you may get input from a small business owner who says owning is best because you're building equity, you might also have a friend who enjoys the convenience of renting. There is no one-size-fits-all answer to this one. Instead, you will want to take a number of factors into consideration when deciding whether to rent or buy, including your business growth plans, your anticipated financial investment, and the community and neighborhood itself. The right answer for your business should be right for you and your plans, not necessarily someone else's.

In this electronic age, you can't believe everything you read. You need a team of knowledgeable experts on your side to ensure the success of your commercial real estate endeavors. Whether you hope to buy, lease or invest in commercial real estate, having an agent you can trust can make all the difference.