3 Tips For Buying Commercial Rental Property

4 January 2021
 Categories: Real Estate, Blog


If you invest money in real estate but focus primarily on residential properties, you might want to wander into the world of commercial properties at some point. Buying commercial rental properties has some similarities to residential properties, yet it is also somewhat different. As you begin considering this option, here are three tips to keep in mind. 

Consider the Types of Properties

Commercial real estate includes any type of property used for business purposes. Some examples of commercial rental properties include office space, manufacturing space, and warehouse space. You can also purchase many other types, and you will need to think about what types you want to buy. If you are unsure about which types to invest in, talk to other real estate investors. You can also talk to a real estate agent. Focusing on a specific type of commercial rental property is a wise idea when getting started in this field.

Think About the Location

As a real estate investor, you might need to carefully consider the location of the properties you purchase, especially if you are an active partner. Silent real estate investors fund projects, but they do not typically take part in the day-to-day activities. Active partners might also fund projects, but they also take part in the management. Which type of partner will you be when purchasing commercial properties? If you plan to manage the properties, you might need to limit your purchases to your local area. If you buy real estate that is far away, it might be challenging for you to manage it from where you live.

Assess the Condition and Challenges of Commercial Rental Properties

Finally, you must do two additional things. First, you must know how to assess a property's condition before buying it. Secondly, you might need to evaluate the challenges of renting commercial space. One challenge is finding a tenant for the space. Tenants that lease commercial space are very specific about what they want and need in a property. Therefore, they may look at all the options and study the market for months before choosing one. Secondly, they might need to customize the space for their business needs. Are you willing to fund the projects for the space, or will they have to pay for this themselves? These are a few things to consider as you search for commercial properties to purchase.

As you search, make sure you find a realtor with commercial real estate experience. Likewise, contact a commercial real estate provider for more information.