Commercial real estate is one of the most potentially lucrative investments you can make, and it’s an excellent way to preserve your wealth and protect yourself from inflation. But there are no “sure things,” and plenty of real estate speculators have learned some expensive lessons along the way. Some properties aren’t nearly as easy to flip as they seem, and you’re responsible for making the mortgage payments, whether your office building is fully occupied or not. No matter how experienced you are at buying and selling commercial properties, it’s always a good idea to seek professional advice before proceeding with any real estate investment!
Our team at Ferstl Valuation Services has proudly offered trusted property appraisals in Little Rock since 1967, and J.T. Ferstl, MAI, is an Arkansas-licensed attorney with decades of experience as an expert witness in eminent domain cases and other property disputes. We also offer real estate consulting services to help you evaluate the risks and rewards of your property investment so that you can make an informed decision. Here are a few things you should consider before making any offer:
Is the property accurately valued? Motivated sellers are often prepared to offer rock-bottom prices to raise quick cash for other investments, but if the price sounds “too good to be true,” it likely is! An independent appraisal typically takes one or two weeks, and it’s always a good way to vet any new property investment.
Do you have enough cash? One of the benefits of purchasing a fully leased office building is steady cash income from tenants. Unfortunately, the demand for commercial office space tightens up anytime our economy worsens. You’ll need enough cash reserves to service the mortgage as you search for new tenants, and you’ll also need to budget generously for preventive maintenance and unexpected repairs.
How long do you intend to hold the property? A “buy and hold” strategy makes sense for most investors, but there are also plenty of aggressive investors who see a market poised for growth and try to get in early. There’s nothing wrong with speculating if you’re prepared to take certain risks, but an investment analysis enables you to “look before you leap!”
To learn more about Little Rock real estate consulting services or to schedule an independent property appraisal, contact us online or at 501-375-1439.
