The market for real estate investments can be full of pitfalls and downturns. Whether you’re new or old to real estate investments, there are five essentials that every real estate investor should keep in mind to help them remain on top of their game:
• Look at the big picture. If you’re serious about purchasing commercial real estate, you need to take a step back and think about the larger issues. Come up with a master plan for your investments, think about a long-term timeline and decide which types of properties you’re looking to acquire.
• Investigate carefully. Make sure to do all your due diligence on any properties that come up. Sometimes, you might have to pass up on an offer because you’re unable to do due diligence. Remember, if something sounds like it’s too good to be true, it probably is. Take the time to do your homework on all your real estate investments, no matter what property you’re looking at.
• Consider geography. While most investment is local, good deals can spring up farther away. However, with geographically distant investments, you’re committing to either hiring management or spending time and money regularly to check up on the property. Although sometimes investments that are farther away can work out, you should probably start locally.
• Focus on relationships. Every person you work with to make real estate investments is important. Make sure you keep your professional relationships in mind when you move forward. You can be sure you’ll need good professional contacts as a real estate investor.
• Develop your exit strategy. The real estate market can be highly unpredictable. As part of your long-term strategy, you’ll want to develop an exit plan. You should think about what will trigger your exit (at a certain age, when the market hits a certain point) and what you’ll do at that point. Sometimes it’s best to cut your losses and get out while you still can.
Keep these five essentials in mind whenever you get started in commercial real estate and you can avoid many major problems that investors face. Planning for the long run will help you out on your path as an investor.
