There are a number of misconceptions floating around the market when it comes to commercial real estate and it is important to identify them. These misconceptions can deter the investment and risk-taking behavior that is required in this market to be a successful investor.
You need considerable funds to get started
This is one of the most common misconceptions in the real estate industry, you don’t need to be swimming in funds to invest in your first property. Banks don’t just look at your balance to approve your financing, they also look at the potential profits from your operation. The more attractive the deal, the more likely you are to get your financing, however, you don’t need to rely solely on your banks; there are always private lenders who would be willing to help you if you make the payment.
The numbers are too hard
These days, there are many software options on the market to do the field work for you, you just need to know your numbers and the software will calculate the rest for you. The rest comes down to you being able to interpret the numbers to make informed decisions when it comes to your real estate needs.
Most commercial properties are advertised
Contrary to popular belief, most of the commercial properties available are not listed in the newspapers nor will you find bandit posters advertising the properties you want. You should consult a real estate broker who has considerable investor-owner contacts for a complete list of all available properties in your area of interest.
Managing a commercial property is much more complicated than a residential property
Managing a property is not a joke, but the problem is that the profits from commercial properties are much more than those from residential properties. Thus, one can afford to hire a management service to operate in their place and take care of all aspects of managing their property, including using their full list of vendors.
Good deals are hard to find
No matter the market situation, it will always be possible to find a good offer in the real estate market, there are always certain types of properties and other factors that make this reality possible. However, this is all dependent on you making a reasonable effort to get the deal done.
A single agent can equally represent both sides
An agent will invariably care about the interests of the lessor and not those of the investor or buyer, the agent will always have vested interests and therefore will act as a dual agent in some way. Therefore, it is always best to hire your own agent to represent your interests.
These are some of the common myths that surround the commercial real estate industry.