You’ve probably heard the saying, “To err is human.” While we all make missteps occasionally, avoiding common pitfalls is preferable, especially when those errors could have significant professional and financial consequences.
As a result, if you’re considering venturing into commercial real estate investment, it’s wise to seek expert guidance and do your best to steer clear of the usual beginner blunders. Here are some common property investment mistakes you should avoid, according to Investopedia and Forbes.
1. Not defining your investment strategy.
Before investing in commercial real estate, you must think hard about your specific roadmap and objectives. Here are some questions to ask yourself:
- What type of property do you want to invest in (e.g., industrial, office space, retail, etc.)?
- What’s your ideal location for commercial real estate investment? Are you looking for something local or in another region?
- How long do you plan to hold on to the property?
- What are your plans for property management? Do you anticipate hiring a commercial property management firm?
2. Failing to conduct enough research.
Completing thorough research is essential when making any purchase, particularly something as major as commercial real estate. Do your due diligence concerning not only the property itself but also the surrounding area. Here are some of the questions you should ask before moving forward with your property investment.
- Why is the property for sale?
- Does it require any repairs or renovations?
- Are the area’s demographics likely to change in the immediate and long-term future?
Is the property located in an area prone to natural or human-driven disasters?
3. Overpaying because you’re excited about a property.
You might be anxious to close a deal and rationalize that you can afford to pay more than anticipated or more than a property is truly worth to beat the competition. However, consider how much overpaying will set you back and whether you can truly afford it, especially when factoring in renovations, insurance, maintenance and so on.
4. Not asking for help when you need it.
Expert guidance can make all the difference if you’re new and just figuring out how to invest in commercial real estate. Don’t hesitate to seek assistance from property investment experts like the Avalon Realty team. We’ll protect your investment like we own it, whether we’re researching, negotiating, and closing a deal on a single building or a million-square-foot property. Visit our client services page to learn more about our property investment services and other commercial real estate services. You can also connect with our team of real estate experts by calling 847-506-1000 or emailing info@avalonreal.com.