Tips for Rehabbing a Commercial Property
If you are like many individuals today, you are looking for ways to diversify your investment portfolio. You may have even learned about real estate investment and started investing in residential properties. However, whether you plan to use them for your own business or as an income property before you start searching for commercial real estate investments, there are a few rehabilitation tips you should consider.
Start With a Plan
When you purchase a property, start with a plan. What will it be used for? Why is it a good investment? What are the challenges or problems with the building or land? Outline your plan and expected return. Work with your team to solve any problems you identify initially. Don’t forget to identify why you are making this investment, particularly the renovation.
Build a Budget
Next, review the amount of money you want to spend and where it will come from. You can purchase or rehab your property with personal cash, mortgage loans, owner financing or government-backed loans. Whatever financing choice you make, be sure you can afford the initial outlay and payments. Build and stick to your budget.
Work Closely With Your Contractor
If you have invested in other properties, you know the value of having a dedicated, reliable, high-quality contractor. These professionals understand the industry, zoning and inspection requirements and how to get the most out of your investment. However, you are responsible for keeping the lines of communication open and holding these individuals to a set schedule. When problems arise, you should be informed immediately so you and your contractor can find a solution and maintain your schedule. Every day your project is delayed costs money.
Learn and Apply Industry Trends
Your tenants, customers or buyers have specific expectations of different types of properties. Therefore, follow industry trends. However, all these individuals have additional expectations for any type of property. For example, your clients may require sustainably sourced materials, alternative energy options and highly efficient lighting and appliances. Learn about the current industry trends and at least provide the basics. To get the greatest return on your investment, go beyond these trends if your budget allows.
Focus on Curb Appeal
You have probably heard how important a good first impression is. Your landscaping and outdoor spaces are the first things most buyers, customers or tenants see when they approach your property. Therefore, these areas need to be aesthetically appealing, safe and functional.
Unless you build it yourself, you are probably never going to find a property that has everything you want and doesn’t need any updates. However, you can add value and utility to your commercial real estate projects through effective renovations.
