Once you’ve chosen your property, you still have an active role to play in ensuring that it results in the greatest returns over time. Commercial real estate should never be seen as a passive investment. The most successful investments are those which are actively managed to ensure maximum operating potential. Three ways to do this:
4. Play the long game
To play the long game means “active participation in achieving goals which will take some time,” in other words, forgoing short-term profits for long-term rewards. Optimal returns on commercial property necessitate this type of investment being long-term – likely seven to ten years - the consequence of which is that the capital invested will not be accessible for some time. Resign yourself to the reality that your capital is out of your hands for the time being – it will be worth it!
5. Budget ahead
You can pretty much bank on unexpected costs when you invest in property. Set aside additional funds in readiness to cover such expenses so that you are not knocked off course when they arise.
6. Alleviate vacancy
Vacancy is a significant risk to commercial property owners. Once you’ve made a well-researched investment, further limit the risk by putting your eggs in many baskets, so to speak, by letting to multiple tenants as opposed to one tenant. There is obviously more work involved in servicing multiple tenants, but the reduced risk makes it well worth it.