Investing in commercial real estate can be a lucrative career or side business if you know how to get started. According to experienced investors, one of the biggest mistakes people make when they are new to commercial real estate is waiting for the perfect time to invest. There is no such thing, and you could end up waiting so long that you let excellent opportunities pass you by.
Start Simple but Have a Plan for Expansion
Experienced commercial real estate investors recommend buying one or two properties after you have acquired enough start-up funds. Once those start to turn a profit and provide you with working capital, move on to buying your next properties. Experts also recommend starting with small properties and building up to buying larger ones since that is where most of your profit potential lies.
One reason that real estate investing is so popular is that it always leaves people with assets despite current market conditions. Should the market take a downturn to the point where few people are buying homes, you just have to wait it out until the markets improve.
Open a High-Interest Savings Account to Invest Your Profits
Regular savings accounts pay extremely low interest, so you won’t gain much even with a large balance. A better bet is to place the money you earn from commercial real estate into a Certificate of Deposit (CD) or Individual Retirement Account (IRA). Just keep in mind that you cannot withdraw from an IRA before age 59.5 without incurring a penalty in most cases.
Don’t Sell Properties Too Quickly
New investors who are anxious to realize a return often sell their properties too fast, not realizing that patience is a virtue when it comes to making money in this field. They recommend waiting to allow the property to appreciate for as long as possible and sell during times of housing scarcity.
Need start-up funding for your new commercial real estate venture? GM Capital Group can help. Please contact us at your convenience to learn more.