There are a number of misconceptions floating around in the market when it comes to commercial real estate and it becomes important to identify them. These misconceptions can deter investment and risk-taking behavior that is required in this market to be a successful investor.
You need considerable funds to start
This is one of the most common misconceptions in the real estate industry, you don’t need to be swimming in funds to invest in your first property. Banks don’t only look at your balance to approve your funding, they look at the potential profits of your deal as well. The more appealing the deal is the more likely you will be to get your funding, however, you don’t need to rely on just your banks there are always private money lenders who’d be willing to help out if you check out.
The numbers are too hard
These days there are plenty of software options in the market to do the legwork for you, you just need to know your figures and the software will compute the rest for you. The rest just boils down to you being able to interpret the figures to make informed decisions when it comes to your real estate needs.
Most commercial properties are advertised
Contrary to popular belief most of the available commercial properties aren’t listed in newspapers nor will you find any bandit signs advertising the properties of your desire. You will need to consult a real estate broker who has considerable contacts among investors and property owners alike to get a comprehensive list of all the available properties in the area of your interest.
Managing commercial property is much more of a hassle than residential property
Managing a property is no joke, but the hitch is that the proceeds with commercial properties is much more than that of residential properties. So one can afford to hire a management service that operates in your stead and takes care of all the management aspects of your property, including using their comprehensive list of vendors.
Good deals are difficult to find
No matter the market situation it will always be possible to find a good deal in the real estate market, there are always certain types of properties and other factors that make this reality a possibility. All this is dependent on you making a reasonable effort to make the deal happen though.
A single agent can fairly represent both sides
An agent will invariably have the interests of the landlord at heart and not the investor or the buyer, the agent will always have vested interests and therefore act as a dual agent in a way. So it’s always better to hire your own agent to represent your interests.
These are some of the common myths surrounding the commercial real estate industry.