Does the thought of owning a commercial property seem too intimidating? While commercial real estate often involves a sizable upfront investment, there are plenty of ways to craft a lease that works in your favor.
In fact, commercial property investments have the potential to yield more income than residential investments. However, this tough commercial market requires a keen approach to ensure profitability.
What should you consider before making a commercial real estate investment? Read on for our top tips.
Pay Attention to Commercial Real Estate Trends
Before you start looking for available properties, spend time getting to know your local commercial market. More specifically, find out what industries are currently thriving. According to Montgomery County's Economic Development Corporation, our top industries are:
- Computer science and design
- Scientific research and development
- Restaurants
- Healthcare
- Grocery and convenience retail
Always look for properties that can serve top industries. That way, you're tapping into a reliable tenant pool.
Don't Underestimate the Power of Location
There's a reason why location is always a top concern in real estate. Even a great property can underperform if it's not in the right location.
We're currently seeing this in action in Silver Spring's downtown district. BisNow recently reported on the exodus of businesses that have been plaguing investors.
Smart commercial property investments can require predictive skills. For example, properties in south Silver Spring are lower in cost as the area grows. Many believe that buying property there now will pay off in the future.
Conduct Regular Valuations
Property investment size and profitability don't always go hand in hand. In other words, a big price tag doesn't guarantee a strong ROI.
How can you find out how your investment will translate to rental prices? Conduct a thorough valuation that takes into account:
- Location
- Usable square footage
- Comparable properties
- Potential uses
Redo your valuation every few years to ensure that you're maximizing your profits without out-pricing your competition.
Partner With Experienced Commercial Property Managers
Buying a property is only the first step in becoming an investor. You also need to create a long-term management plan that encompasses:
- Marketing
- Tenant placement
- Maintenance
- Accounting
- Tenant relations
Managing a commercial property is a full-time job. If you don't have the time to dedicate to your building, hire someone who does. Property managers can take care of all your day-to-day needs while you not only earn but maximize your passive income.
Call PMI Potomac About Silver Spring Commercial Property Investments
Are you ready to dive into the world of commercial real estate and access higher earning potential? Use this guide to make informed commercial property investments and build your portfolio. Next, find the right property manager to partner with in the Silver Spring area.
PMI Potomac is one of the only property management companies in the area to serve both residential and commercial property owners. Our services are easy to customize to make sure you get exactly what you need. We also offer the expertise to work with military families when they need to relocate at the last minute.
Contact us today to put together your commercial property management plan.
