subject: Buying Commercial Investments [print this page] Because of the government dictum which states that all those who have not been helped by the loan modification program should engage in the process called a short sale (as the New York Times have reported), which allows for heavily mortgaged properties to be sold at a loss, many have flocked the world of residential real estate hoping to earn some money through real estate investment.
But theres a problem right here. With the loads of newbies in the real estate world, especially in residential real estate, it is very hard to make a huge profit. Also, residential real estate is affected strongly by economic conditions. Even the weather affects it as during times of dire weather conditions like snowstorms and hurricanes, the value of properties go down. The same is also true for some sectors of commercial real estate as when an area is damaged by natural calamities or when the economy is bad, their values also take a plunge.
But not all sectors of commercial real estate are like that. So what you need to do is to research, research and yes, research! Its best to know what youre investing into before you take out your check book. Be sure to study it beforehand and look for comparisons so that you know that youre putting your money in the best place to buy investment property. You can also ask around. Investigate and research; this is the smartest thing to do before buying commercial investments.
For instance, after years of research and more than a decade of experience in real estate investment, this is what I have come up with:
There are approximately 16 million apartment owners in Utah and very few self storage investors. Knowing this, youll know that itll be harder for you to make a profit and become successful renting out apartments than managing your own self storage facility.
Self storage has the lowest bank failure rate at only 8%, with office buildings having 63%, apartment complexes at 58% and retail stores at 53%. This set of statistics can help yu know what to invest in and in which sector gives you the highest chance of getting a bank loan.
To break even for apartment complexes, office buildings and retail stores you need more than 90% occupancy rate, while in self storage, 67% occupancy rate will already give you your investment back.
by: Betty Payne
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