When you think about commercial real estate investing you may automatically think that this type of investment is for those with a lot of money to dabble in large complexes, shopping centers and buildings. This is not the case. Small commercial real estate investing has become a premier way to make money in the real estate market, especially since the residential market has bottomed out.
Small commercial real estate investing has different facets. It can range from purchasing an old building and turning it into a restaurant or a store front property. Small commercial real estate investing is the ideal way for you to get started in real estate investing.
Prior to investing in any property, get to know the market as well as the locality of the property you wish to buy. When venturing into small commercial real estate investing, know your market and stay away from blighted areas. The best way to begin in small commercial real estate investing is building a small office development. Some office developments are similar to strip malls but instead of renting storefronts, they are used for professionals and others who need office space.
A small office development can be rehashed from an old building or built on vacant property. If you choose to develop an office development on vacant property, be sure to do a market study to make sure that there is a need for your development within the area.
Another way to invest in a small office development is to turn an old house into office space. This can also be done with “white elephant” retail property. White elephant retail property is all over the country. You know a place near you. It is a usually a restaurant or bar that keeps changing hands because it is in a poor area. People will continue to purchase the property and insist on making it into a restaurant, each time thinking that their restaurant will be “the successful one.” White elephants make poor investments unless you completely turn the business around and make it into something totally different. Office space is always in demand. Taking a white elephant property and turning it into an office rental is one way to go about small commercial real estate investing.
Small commercial real estate investing can also refer to the amount of money you are investing in the venture. If you decide to go into your commercial real estate investment with partners, you obviously will not need as much capital to invest into the property. You will have to split any profits or revenue with your partners, but you incur less of a risk. This can be a good way to get started in small commercial real estate investing.
When considering small commercial real estate investing, the most important thing to know is the market and the location of the property. Location is always the primary consideration when investing in any real estate and this is no different when it comes to commercial real estate investment. Whether you decide to embark on a small property investment yourself or go in with others, choose a good location in which to invest.