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4 Tips for Investing in Commercial Real Estate in a Slow Economy

Updated: Sep 7, 2018

Commercial real estate, like many other market indicators, sees regular ups and downs throughout the years. The commercial real estate marketing in Anchorage is no different. We are seeing an uptick in vacancies as the Alaskan economy appears to slow overall. However, there are lucrative opportunities available for investors with a long-term strategy.

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If you’re considering investing in commercial real estate, here are a few strategies to consider.

#1: Set Your Goals

Buying commercial real estate is a long-term investment. However, you still need to have a plan to get a solid return. Is your goal to use this property as an ongoing revenue source? Is your goal to sell the property as soon as possible to make a lump sum return? Understanding your goals and what you intend to gain from this investment is the first step to finding the right property for your needs.

#2: Be Patient

One benefit of investing in commercial real estate in a down market is that you have the upper hand. It is to your advantage to be buying real estate when many property owners are selling. You have the ability to be selective. You’ll also find many great deals on properties to fit various needs.

#3: Negotiate Aggressively

Again, as a buyer, you have the advantage in this economy. Understanding how to negotiate a great deal on a commercial investment is key to success in this market. Hiring an experienced commercial real estate professional to negotiate the best deal on your dream property is a wise investment.

#4: Have a Property Management Plan

Managing a commercial real estate property is just like running a business. You need to have a plan for your cash flow and operations. Consider each property carefully. How much should you plan for repairs? How will you find tenants for your properties? How will you negotiate leases that provide enough income to make the investment worth your efforts? How will you find and retain vendors to manage the repairs? This is another area where hiring an experienced and trustworthy commercial real estate team can mean the difference between a worthwhile investment and a disaster.

Overall, commercial real estate offers quite a few benefits for a savvy investor. The right property can offer stability, portfolio diversity, cash flow, and appreciation. Unlike the risky practice of buying stocks or purchasing shares in a company, real estate offers a portfolio that is backed by hard assets. While the market may go up or down, the investor still retains the same property. However, timing is crucial to success.

Have you considered investing in commercial real estate? Schedule a consultation with the experts at ComServ Realty to discuss your options and build a strategy to fit your unique needs.

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