Commercial real estate investment can provide great earnings potential with nominal risks for investors. Generally, there are two types of investors in the commercial real estate market — ones who prefer to hold on to their investments for longer periods of time in order to garner larger returns and those who would rather settle for decent gains coupled with a considerably shorter holding period.
To increase favorability, the later opt for short-term strategies that often help stimulate higher returns in the short period of time that they acquire and hold an asset. Below, we’ve listed a sample of short-term measures used by experienced investors that can potentially amplify your personal investment returns.
Fix and Flip
Fix and flip is one of the fastest ways to make a profit from a commercial real estate investment opportunity. The first step to successfully executing this strategy is buying a commercial property below its market value price. This can be tough to accomplish alone, but with the aid of a professional realtor, purchasing commercial properties under their market value prices can easily be within your grasp.
The second step in this strategy is to renovate the property yourself, as opposed to handing it over to a renovation agency. This will likely save you money on remodeling the commercial property, eventually widening the gap between your overall costs and profits.
Fix and flip is one of the best short-term investment strategies and investors are likely to make considerable returns implementing this strategy. However, we do highly recommend that you perform a proper due diligence and estimate the total repair costs you might incur before purchasing any commercial property. This way you won’t end up with a burdensome renovation cost that could very well lead to an unsuccessful capital investment.
Short-Term Buy and Hold
This technique never gets old. Buying and holding commercial properties for a short period of time can often prove very attractive to you as an investor.
Businesses across the United States are booming and the skyrocketing trend of new startups adds to the cause. From gigantic online retailers to small outlet stores, all are in need of space to store their valuable inventory and many require a formal location for potential customers to visit their storefronts and manage business dealings.
The art to winning this technique is by purchasing commercial properties in growing areas of metropolitan cities and waiting for the prices to appreciate respectively. Commercial properties in these areas usually gain value within a quick span of time, oftentimes in as little as six months. Although this option might be relatively expensive, the potential returns can completely outperform the investments. If you are planning a short-term gain and low-risk strategy to amplify your profits, going for this option may prove highly profitable for your investment portfolio.
Commercial real estate investments can constitute a high degree of risk. The price appreciation for commercial properties usually goes line in line with a number of different factors. As an investor, you should take precautionary measures before putting your money in any commercial projects by evaluating all of the risks involved.
Furthermore, by hiring professional realtors who specialize in commercial real estate, you can greatly reduce the chances of any unforeseen events that could result in major capital investment losses.
Interested in learning more? Meet with one of our professional commercial real estate brokers to discuss your current investment strategies today!
Disclaimer: The strategies mentioned above are purely for informational purposes only. We are not liable for any damages or losses you suffer when deploying or employing these tactics and tips.