Factors to Consider When Buying Commercial Real Estate
With a career spanning over a decades, Michael Snedeker serves as executive vice president of Elite Building Corp. in Waltham, Massachusetts. Michael Snedeker has been involved in the development of commercial real estate projects in the Greater Boston area.
Although the commercial real estate market can generate high returns for investors, there are also associated risks when it comes to market volatility and economic downturn. To seize opportunities and minimize risk when investing in commercial real estate, investors should look at cities with low unemployment rates. Low unemployment rates signify a stable job market in which businesses are consistently looking for office and retail spaces.
Investors should also perform market analyses to compare the tenant demand and vacancy rates of different locations. When a market has high tenant demand and low vacancy rates, owners can ask for higher rents. Investors should also consider investing in distressed or foreclosed commercial properties in up-and-coming cities to initiate a more affordable deal, thereby maximizing long-term profits.