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4 Common Commercial Real Estate Mistakes to Avoid

4 Common Commercial Real Estate Mistakes to Avoid

Real estate is an enormous and extremely complex industry. With that said, even the most experienced people tend to make a few dangerous mistakes when making investments or transactions for commercial real estate.

Below is a list of four of the most common commercial real estate mistakes to avoid, especially if you are a new investor.

Poor Financing

Facing the consequences of poor financing is one of the things which almost every person in the real estate industry has to experience at some point in their career. Poor financing is perhaps the number one reason due to which real estate investors go out of business.

Poor financing can take a number of different forms. These can include high interest rates, high monthly payments, and balloon payment made at the end of a loan period.

Improper Location

Real estate values are all about the location. Since the location of a property is one of the major deciding factors in the profit you will get out of the investment, choosing the right location is crucial. Most people, however, tend to ignore this factor and end up facing a loss. The best part about buying property or investing in a well-reputed area is that you are bound to get great returns on your investment.

Making Emotional Decisions

People tend to make emotional decisions when investing in real estate. This is particularly true when investments are made in auctions. You must have a basic criterion in your mind about everything from the location you prefer, to the price you are willing to pay for a specific property and how much profit you are expecting.

Trying To Do Everything Alone

Professional help is extremely important in making good real estate investments. New investors are often very excited about their first deal and wish to do everything by themselves. Unfortunately, they soon realise that this was a great mistake. It is crucial to be in contact with professionals of the industry including brokers, realtors and contractors as their experience can help you make the right decisions.

 

Contact Nav Sidhu to learn more about how you can make the right commercial real estate investments.