Maintaining a portfolio of commercial properties offers many benefits for investors. It’s a great way to protect your long-term wealth from inflation, receive monthly cash income, and enjoy certain tax benefits. But even affordably priced real estate isn’t cheap, and there’s a lot at stake each time you buy or sell a property! You owe it to yourself to back up any decision you make with sound professional advice, and our team at Ferstl Valuation Services is here to help!
We’ve been offering trusted property appraisals in Little Rock since 1967, and J.T. Ferstl, MAI, is an Arkansas-licensed attorney who’s available to serve as an expert witness in property disputes and eminent domain cases. We also proudly offer professional real estate consultations to help you ensure that your investment decisions are based on accurate, up-to-date market research. Here are a few things you should always consider before making an offer:
How does the property “stack up” against comparable properties? The recent sale prices of comps are an excellent benchmark for determining whether the property is reasonably priced, but you should always think in terms of value over price. There’s nothing wrong with paying a premium price for a recently renovated property, but bargain-priced “fixer uppers” can quickly turn into money pits if the repair costs exceed your initial estimates.
How long do you intend to hold the property? “Buy and hold” investors understand the value of owning real estate because property values typically outstrip inflation rates. On the other hand, many aggressive investors are more interested in properties they believe they can quickly resell for a profit. But flipping properties is one of the riskiest ways to invest your money, and you can’t always count on finding a buyer when you need one!
Do you have enough cash on hand? Owning commercial properties is a great way to boost your monthly cash flow, but the demand for commercial real estate is cyclical. You’ll be responsible for servicing the mortgage even when your building isn’t fully leased. You’ll also need to budget generously for ongoing maintenance costs, as well as for expensive repairs that occur at the most inconvenient times possible!
To learn more about real estate appraisal services in Little Rock or schedule a no-obligation consultation, contact us online or at 501-375-1439.
