Are you an investor looking to buy a commercial investment property in Denver, CO? The state has a booming economy, and no doubt the capital city will continue to bring opportunities to entrepreneurs.
So, how do you invest in commercial real estate in Denver? How do you make sure you find a rental property that'll bring in a lot of money?
This primer will show you how to find the best commercial property to use as an asset for rental income.
Here's what you must know:
Rental Analysis Comes First
Before you consider buying an investment property, you should always conduct a rental analysis. While you might like a particular commercial property, smart business owners always ask for an expert opinion.
A rental analysis will give you an idea of how much you can rent the commercial property for. It's best to avoid buying commercial properties that don't have a high price for a rental analysis.
Commercial Real Estate Must Be Promoted
Property marketing is always a challenge, but it's especially crucial for commercial real estate. You'll need to target a specific demographic for your rental property.
For example, does your commercial property work as an office? Does it work as an office for a lawyer and an accountant? Or is your property suitable for a clothing store? What about a photography studio?
You have to discuss how your commercial property can benefit entrepreneurs and companies. You'll have to sell the idea of an entrepreneur working out of your property.
Factors to Consider When Buying Commercial Real Estate
Let's end by analyzing the factors you'll have to look at when buying commercial real estate.
The first consideration is your risk tolerance. You have to decide whether a commercial property is worth your investment.
For example, let's say you have to pay $1 million for the property. Let's presume the rental analysis states you can charge a tenant $10,000 per month.
This process would take 100 months for you to break even. You have to consider whether that length of time is worth it.
Another consideration is liquidity. You might need to sell a commercial property at one point. You want to choose a property that you can easily sell at a moment's notice.
A final consideration is managing the property. You'll have to think about how much time you can spend looking after the property and dealing with tenants. However, this is the least stressful aspect as you can hire a property management company to help you.
Invest in Commercial Real Estate
Now you know how to invest in commercial real estate in Denver and succeed with your investment.
Start by getting a rental analysis of any investment property. This helps you decide if the investment is worth it. Make sure you also know how to market this property.
You'll also have to consider several factors when buying the property. You don't have to manage the property on your own; you can work with a property manager.
PMI Elevation is here to help Denver landlords. We have 20 years of experience and would love to chat with you.
