Investing in stocks may be the most popular way to build your portfolio, but it’s volatile and you deserve returns you can rely on. The best way to get those returns is through commercial real estate investments.
There are more than 627,000 new small businesses starting up each year and many of those businesses will need a storefront or warehouse for their operations. Commercial real estate investors can provide those storefronts in exchange for rent.
Before you buy a property, spend some time learning how to invest in commercial real estate. Here’s what you need to know to get started on the right foot.
Figure Out What Properties You’re Interested In
Once you decide to start investing in commercial real estate, you’ll need to think about the types of properties you want to invest in. There are four main types of commercial real estate that you can choose from, including:
- Retail storefronts
- Office buildings
- Industrial properties and warehouses
- Condominiums and apartment complexes
Each option offers the potential for high returns and consistent monthly rental income. However, you’ll want to choose properties that you’re comfortable working with, in industries that are showing steady growth.
Decide Between Active and Passive Investing
When you’re investing in commercial real estate, you’re able to choose between becoming a landlord and taking an active role in property management or working with a real estate investment trust (REIT) that allows you to purchase an interest in a property passively.
Think about how you want to invest. If you want to learn how to be a landlord and are willing to put in the work, taking an active approach will be a good idea. However, if you just want to diversify your investment portfolio without taking on extra responsibility, passive investing will be a better choice.
Work With a Real Estate Agent
To find the best commercial real estate investing opportunities, don’t try to navigate the search on your own. Instead, work with a real estate agent that specializes in commercial properties.
Invest in the Right Insurance
Once you find a property, you’ll want to protect your investment and the best way to do that is with comprehensive insurance. Look for commercial property insurance to protect the building itself. Just make sure you choose a policy that fits your property’s unique needs.
For example, if you own a motel, you’ll want to choose a dedicated motel insurance policy. If you own an apartment complex, you’ll want to choose an apartment owner’s insurance policy.
Now You Know How to Invest in Commercial Real Estate
Learning how to invest in commercial real estate is easier than you think. As long as you keep these things in mind, you’ll be able to start investing in real estate the smart way.
Once you do, you may be able to increase your earning potential for years to come.
Looking for more ways to diversify your portfolio? Check out our latest posts!
