Investing in Commercial Real Estate is Wealth Well Built
For any businesses or individual with expendable capital, a commercial real estate investment can be a great method for wealth expansion. The opportunities within the industry vary greatly. As with any commercial real estate opportunity, Vandaveer Commercial can bring valuable expertise that allows each investment to become financially beneficial for every client.
As you consider your investment options, below is a list of the top five reasons Vandaveer Commercial recommends considering commercial real estate investment to expand your financial horizons.
Top Five Reasons to Invest in Commercial Real Estate
Consistent returns The value of each commercial real estate investment is primarily predicated on the amount of net rental income the property has and can produce combined with the financial credibility of the tenant(s) that lease the property. By purchasing an existing income-producing commercial property at the right price based on these factors, investors can ensure consistent returns on their investment for an extended period of time.
Equity growth The equity accumulated in a commercial real estate investment is the fundamental base for investors to build wealth. As the equity of the investment continues to grow it provides financial flexibility to the investor as well as the opportunity to create financial leverage, which can compound the income and returns of the investment along with other possible future investments.
Tangible asset Unlike many other investments, commercial real estate is a tangible asset that maintains an inherent value. While the value of a property may fluctuate over time due to a variety of factors, value will always exist. In addition, the tangible asset and its value can be protected through levels of insurance which is a standard operating expense that can be passed on to the tenant(s) with little to no financial effect on the investor.
Diversification and Stability A commercial real estate investment is a good opportunity for an individual and/or business to diversify their investment portfolio as the factors that affect the value can be much different than that of other investment options. In addition, commercial real estate is considered a longer term and more stable investment than others. When other investments become volatile, a commercial real estate investment will continue to consistently perform if handled correctly.
Control Whether it is a decision to raise the rent, shop for better insurance rates to help the bottom line, or provide a promotion to attract a new tenant if there is a vacancy, investing in commercial real estate gives the investor the ability to influence their returns. Rather than being completely beholden to others for the financial outcomes, an investor in commercial real estate has the control to make decisions to better the financial situation and ultimately improve their returns and wealth.
About our Process
With years of experience negotiating effective deals for our clients, Vandaveer Commercial uses an established process that saves time and money for our clients. Here's how it works:
Confirm Situation - The imperative first step when investing in commercial real estate is to gather and share information that will solidify the expectations and possibilities of the investor and their potential investment. By ensuring a common understanding of objectives and requirements, the broker and investor can work effectively by focusing their efforts on specific investment opportunities.
Research Opportunities - Through a variety of methods, the broker's job is to search the market for multiple investment opportunities that fit within the investor's budget and expectations and share that gathered information with the client.
Focused Search - In most markets there are a multitude of investment opportunities available at any given time. It is typically best to focus the efforts on the few investment properties that will best fit the investor's situation and expectations.
Contact and Communication - By establishing contact with the agents for the prospective investments the broker is responsible for sharing information on each opportunity with every client. Through the process of exchanging communication with agents, typically through Letters of Intent, the objective of the broker within the industry is to provide each client with the best investment opportunity for every transaction.
Reach an Agreement - As the information is shared and gathered on the prospective investments, the broker will advise each client on expectations and educated suggestions on how to proceed forward. Ultimately, every transaction will be the decision of the individual client. Once an agreement of terms is reached between a client and a Seller, a Purchase Contract will be drafted. This Purchase Contract details all aspects of the transaction. At this phase, it is the broker's responsibility to review and advise each client on details regarding their best interests. Once the document is satisfactory and acceptable with both client and Seller, it will be fully executed and all involved will work towards a closing.
Closing the Deal - A large majority of commercial investment transactions culminate in a Closing that is typically coordinated through a third party Title Company. It is the broker's responsibility to ensure that all necessary legal documents required for the Closing are included and correct. In addition, the broker will be responsible to communicate and coordinate with all involved that the Closing is scheduled, confirmed, and ultimately finalized.
Enjoy the benefits - If and when a closing occurs and a transaction is finalized, the only thing left for the client is to enjoy the benefits of owning a commercial real estate investment. The broker's job is to stay in contact with the client and remain a resource for any needs regarding the investment or any other property or commercial real estate services required.