Red flags in commercial property investment

April 23, 2015

Investing in a commercial property sounds a very practical idea. But like any other type of investment, there are many pitfalls that will come your way once you buy this venture idea.

Below are some of the actions to avoid before you even manage to put every resource you own in one outlay.

Assuming that ROI is Fast

Many advertisements and investment gurus promise that commercial property ventures are all easy money. Here’s a news flash: you’re not investing in a pair of sneakers or a second-hand car here. It’s a long-term investment that will only bear sweet fruits with sweat, hard work, some smarts, and high tolerance to risk.

Being a One-Man Team

Property investment isn’t a one-man game. A key to building your success in this endeavour is to hire the right people and build a healthy working relationship with them. You will need an appraiser, an inspector, a lawyer, a team of professionals that specialises in property purchases, and hands-on assets administration. When dealing with purchases and management, you can always partner with us and we’ll show you how to make the most of this industry.

Underestimating Cash Flow

Cash is the fuel that keeps the business running. It’s a simple mantra, but you will suffer from the devastating consequences if you forget about it. Always watch out how money falls in and out of the system. Getting an accountant will be of great help, especially when you’re trying to determine the value of the assets in a given period.

Having no Plan B (C, D, and so on)

What ifs are natural in business. Realising this, it’s important that you have more than one exits when things go haywire. Exits can be really an “exit,” e.g. reselling the property or improving the property to appear remarkable and marketable.

Property investment is not easy, but if you framed your mind right, you’ll easily see it as a maze with a visible exit. Don’t enter the maze alone. Browse our other pages to see how we can help you.