How to Get Started in Commercial Real Estate
If you’re the owner of a small business and you’ve been thinking about ways you can grow your company and build your wealth over time, you may have thought about purchasing commercial real estate. Given the right circumstances, real estate can be an excellent investment that tends to appreciate over time. However, if you’ve only had experience with residential properties before, commercial ones are a bit different. Thankfully, getting started doesn’t have to be complicated! With a few key strategies, you can start your commercial investment venture with confidence. Take a look.
Check Your Position
Before you begin investing, it’s important to check that your business is in a good position to purchase real estate. Some factors include the amount of time you’ve been in business, whether your company is public or private, your company size and whether your tax situation would benefit from your owning real estate. For instance, if you’ve been in business for five or more years, are a privately held company and have a good idea of what your growth will look like over the coming years, buying real estate could be the right choice for you.
Choose Your Type of Loan
When searching for financing options for your investment, you’ll be happy to know there are several types of loans, so you can choose the one that best suits your needs. For instance, you could get a loan through the Small Business Association, which will require a small down payment and give you a fixed interest rate. You could also go to a bank or credit union for a conventional loan. If you can get in contact with the seller directly, you could even get seller financing, where the building owner sells directly to you, and you enjoy a lower interest rate and a more flexible plan.
Consider Paying in Cash
If you have the funds available and are eager to get started on your investment venture, paying for a property in cash could allow you to own the building outright and immediately use it or lease it out, giving you a steady second stream of income. Of course, if you’re considering this route, be sure the purchase price is less than your total savings, as you won’t want to spend all of your funds in one place.
Commercial real estate can be a great investment for small business owners, but the process of investing for the first time can seem complex or even intimidating. Luckily, it doesn’t have to be that way! With these tips under your belt, you can feel confident you’re making the right investing decisions for your business.
