As with any professional endeavor, due diligence is a key aspect when getting started in commercial real estate. First, understand how the commercial real estate market differs from the residential market. Properties are valued relative to usable square footage, and leases last longer, both of which contribute to higher income potential.
Next, analyze comparable properties in the area to gauge the current market value of the property you are interested in, and research future developments to get an idea of how that value might change over time. Calculate all costs as precisely as possible, including operating fees such as utilities, insurance, repairs, and property tax, as well as capitalization rates and return on investment. Finally, work with a trusted financial advisor to get the best commercial real estate loan rate possible.