5 Mistakes You Must Avoid While Investing in Commercial Real Estate
- Check with seller
- Published date: October 27, 2020
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- Mumbai, Maharashtra, India
Investing in real estate involves assessment and careful planning of various factors. More care is needed when you are investing in commercial office space in Andheri as the investment is huge and many factors determine the returns and price appreciation in such type of property. The market of commercial real estate is dynamic, and several aspects determine the earning potential and rent and even the change of property price rise from time to time. There can also be a huge impact on the earning potential of the property when there is a change in government or change of policies. The earning potential of the property is also affected by environmental impact in an area or new laws relating to the protection of Mother Earth.Here are some of the five common missteps and oversights that can derail your investment.
- Doing all by yourself
For a cost-efficient and stress-free experience working with a real estate professional when you are planning to purchase a commercial office space in Andheri. An experienced agent in the commercial property market must be contacted who is well-known for the property type you are considering purchasing. Their professional network and expertise are a valuable resource when you navigate the property buying process from start to end.
2. Incorrect property valuations
Your business will incur larger losses in future when you pay more for the property valued against actual price in the market. Before finalizing any deal, ensure that you are aware of all the features and highlights along with all the flaws of the property you are buying. It is equally important to know that you are spending the right amount for it.
3. Focusing mainly on return on investment (ROI)
Projected as a return on investment, a commercial office space in Andheri often is considered as a useful indicator of its viability as an investment asset. But you must not make your decision on this factor alone. You must also consider the appreciation of the property, cash flow, and the amount of equity you gain while paying off your mortgage. Enquire if you qualify for any tax benefits when you purchase a commercial property.
4. Not performing due diligence
The thing that is common between residential and commercial property is the necessity for due diligence before closing any type of deals. Here are some of the factors that are necessary to make fully informed and deliberate decisions when investing in commercial real estate and those are:
- Entire property inspection
- Evaluating the location related to nature, the target market of business, and purpose
- Taking out a thorough risk assessment for the investment
- Rechecking the lenders underwriting requirements
- Know how local zoning ordinances will affect the use of the property
- Knowing the potential hidden charges in the sale term of property
- Reviewing the existing leases and business profiles of current tenants
You must always invest time when purchasing commercial real estate, even when you are competing against others for the targeted property.
5. Lack of foresight and planning
Significant long-term planning is required for commercial real estate purchase. Consider the company’s growth that is equipped with a feasible business plan. You must decide on whether your commercial office space in Andheri can accommodate an increase in equipment and personnel. You must also come up with an exit strategy. It will enable you to facilitate a smooth transition to your next move if your investment does not pay off.
So, these were some of the common mistakes that one must avoid while investing in commercial real estate property. Chandak Group offers commercial office space in Andheri east by which you can make the most out of your investment. To get in touch with the experts you can visit their website at www.chandakgroup.com
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