Wednesday, January 5, 2011

Investing in commercial real estate

Now is a good time to buy investment real estate because prices are low and interest rates for well qualified or capitalized investors are favorable. But there are a few things to consider to ensure you are making the right decision for your investment group.
  • You should be able to profitably hold the property as a rental unit for several years to come as most real estate markets will continue to be soft through 2011. A slow recovery is predicted. Work with your realtor and financial advisor to know cap rates and expenses.
  • Be careful not to over-improve rental properties in lower income areas. Lending guidelines have tightened and there is a diminishing demand for home ownership so re-selling to first time home buyers will be harder.
  • Protect your cash flow and stay liquid to protect against vacancies and rental defaults.
  • Selling a property quickly for cash in order to liquidate may not be an option.
But for the well capitalized investor in it for the long term this is a great time to buy!

1 comment:

  1. The cash flow, tend to be higher, and commercial properties. yield per square meter and the house is usually an initial investment is high. commercial property leasing or rental units, houses can have higher-income tenants.

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