Real estate investing is certainly attractive for many investors, but it takes a lot of knowledge, effort, determination, and skill to become successful.
How Large is the Commercial Real Estate Market
According to IBISWorld, there are currently more than 2.2 million commercial real estate businesses in the U.S., and the total dollar value of commercial real estate is estimated to be over $20 trillion. It is clearly an important industry.
Why is Commercial Real Estate Investing Attractive
Commercial real estate investing is attractive because it has proven over time to generate significant returns. In fact, during the last 20 years, statistics show that commercial real estate has produced an annual return of about 9.5%, or nearly 1 percent higher return than the S&P 500’s average return. Real estate is a tangible asset and properties carry mortgages that allow investors to leverage their investments. There are attractive tax benefits, and commercial real estate investments can offset the long-term impacts of inflation.
Avoid These Commercial Real Estate Investing Mistakes
Notwithstanding its attractiveness, commercial real estate investing isn’t fail-safe. Some estimates suggest that 90 percent of real estate investors fail. Many fail because they consider this to be more of a part-time undertaking or even a hobby. It is neither.
To succeed in real estate investing, it is important to avoid these mistakes:
• Not having specific motivation for commercial real estate investing.
• Not having a specific investing strategy and plan.
• Lack of effort into research. Rather, it is critical to know the market conditions, the area/neighborhood, and the specific property. Thorough due diligence is crucial.
• Making judgments on feelings instead of facts.
• Attempting to do everything on your own. This type of investing requires real estate expertise and competent legal advice.
• Receiving poor financing.
• Overpaying for a property.
• Underestimating all necessary expenses.
• Not scrutinizing contracts.
Seek Expert Financing Assistance
Contact Lode Capital for financing made easy. We offer a wide variety of customized financing options that are critical to your success.