Should You Buy Commercial Real Estate?
If you are considering buying commercial real estate for your own business (own instead of rent commercial space), you’ve come to the right place. We’re putting this video series together to help business owners decide whether they should invest in commercial real estate and become their own landlord. Commercial real estate investing can be daunting but we’ve broken the process down into bite-sized videos. This series is designed for commercial real estate beginners to buy their first property or help experts sharpen their skills.
In our previous video, we talked about the benefits of buying commercial real estate for your own business. In this video, we’re going to talk about some instances of why you should not buy a commercial estate building. Firstly, you should not buy a commercial building if you have a new business. Buying commercial real estate is a long-term decision and you want to be extremely confident with your business because your business IS the tenant. Secondly, buying commercial real estate limits your flexibility compared to leasing. If you’re not positive you’ll be in the same business 5 years from now, I’d recommend against it. Thirdly, you want to make sure that you have at least two years of stable business financials. It doesn’t necessarily have to be Amazon-level revenue but you want to be profitable for a few years with relatively steady numbers. If you are a business owner with a few stable/profitable years, plan to be doing it for five more years, and it makes economic sense for your business, commercial real estate can be an awesome wealth-building tool that you should consider.
Do you have questions about commercial real estate in Sacramento, California, or any other market? Give us a call today. We’d be happy to chat! Our wives are getting pretty tired of listening to us talk about office space so they could use a break.