A well-planned real estate investment strategy can help you blaze a path toward a profitable portfolio.
Owning commercial real estate in Arkansas can offer a steady stream of profit through long-term leases and diverse properties. However, you must create a reliable real estate investment strategy that includes a feasibility analysis before you purchase a property. The following tips will help you make your investment back in commercial real estate.
Do Your Research
Commercial real estate is a long-term investment that requires a great deal of due diligence. When evaluating an opportunity, pay close attention to the location of the property. Use newspapers and browse online real estate listings to determine whether the area is experiencing the economic growth and development that can indicate a sound investment.
If the location shows promise, request a feasibility analysis from a qualified Arkansas valuation company. This report will allow you to weigh the price of the property with the profits you will be able to expect. With this information in hand, you can evaluate the number of tenants and types of lease arrangements needed to make your investment back in the least amount of time. Failing to secure a feasibility analysis can lead to unpleasant surprises, such as unforeseen liabilities or expensive building maintenance, that jeopardize your ability to make a profit.
Diversify Your Portfolio
The wide range of properties available in commercial real estate allows you to create an investment strategy that is less likely to suffer if there is a downturn in a single industry. Some of the most popular commercial properties in Arkansas are mobile home parks and apartments, but you can also choose from office buildings, industrial facilities, retail locations, restaurants, and hotels when building a diversified portfolio. While working with an appraiser to create a feasibility report, it can be helpful to mention the real estate you already own to get a professional opinion about whether a property offers particular risks or rewards in relation to your other assets.
Provide Additional Services
Some of the best real estate investment strategies involve plans to provide additional services at a commercial location. Supplementing the money you make from leases can reduce the amount of time required to make your investment back, and it can even improve your relationships with tenants. If you own property in a busy part of town, you may want to consider providing highly coveted reserved parking spots for a monthly fee. Commercial office spaces can offer opportunities for on-location childcare services or dining options. You may also be able to create a flexible space that can be rented for various events. Consider the needs of your tenants, their employees, and the surrounding community during the research phase of your real estate investment strategy to see if there is an untapped opportunity.
If you are investing in commercial real estate and want to conduct a feasibility analysis, contact Ferstl Valuation Services at 501-313-0641 to schedule an appointment.