Imagine making tens of thousands of dollars per month in passive income. Renting out commercial real estate provides much greater potential than residential properties. However, vacancies hit significantly harder.
In 2023, commercial real estate vacancies increased to nearly 7%. Owners who deal with vacant properties pay thousands each month out of pocket, which can quickly become overwhelming.
When investing in commercial properties for sale in Sugar Hill, GA, it's imperative to have the right strategy. We've created a brief guide that can help get you started on the right track. Let's explore what you need to know.
1. Calculate Your ROI
Your estimated return on investment (ROI) plays a large role in finding the ideal commercial real estate for sale. You can calculate this metric by determining your net yield.
This involves subtracting your functional costs from your estimated annual rent and dividing this number by the total value of the property. For example, this could look something like:
($20,000-$15,000)/$200,000
It's recommended to choose commercial properties that provide a net yield of at least 7%. Otherwise, the stress of acquiring and maintaining the property likely isn't worth it.
2. Research the Local Market
You should never make a Sugar Hill commercial real estate decision without conducting thorough market research. Many people make the mistake of overlooking this obligation, causing them to make poor investments. When looking into this info, consider the property's condition, location, and amenities.
You should also consider the development of the surrounding area. To clarify, Let's assume that a commercial property is located in a less-than-desirable neighborhood.
However, the city plans to invest millions of dollars in developing the neighborhoods around the property. In this case, the property could be a great investment opportunity.
3. Consider Multiple Opportunities
Create a list of multiple commercial properties for sale you encounter. You can then compare them against each other to determine which is the most suitable for your needs. It's best to keep your list relatively short so you don't feel overwhelmed.
You can easily narrow down your options by setting rigid standards. For instance, you could establish that you're not going to purchase property outside of a certain radius.
4. Work with a Professional
To get the most out of the commercial property you buy, it's imperative to work with a reputable property manager. They have the tools and resources to ease your burden as a landlord. When looking for someone to hire, ask about the pricing structure.
Do they take a percentage of rental income, or do they charge a flat fee for their services? You should also determine how they handle obligations like acquisition, tenant screening, and rent collection.
Refine Your Commercial Real Estate Strategy
The tips in this guide will ensure that you develop a solid commercial real estate strategy that helps you reach your goals. From here, you'll generate a strong passive income stream and avoid issues you may have otherwise encountered.
PMI Northeast Atlanta is a full-service real estate asset management company that aims to make property ownership as simple as possible. We tailor each of our services to our clients to help them overcome the challenges they face. You can learn more about how we can ease your burden when you get in touch with us.
