Commercial real estate investors are faced with many crucial decisions, but one of the first choices the investor has to make is whether or not to enlist the services of a professional management company. Of course, there is no across-the-board right answer here; investors must choose what is best for them, on a case-by-case basis. You may decide that a property management company can help you attend to the daily maintenance of your property, or you may decide that you can do all of the upkeep and tenant retention on your own.
But wait: Do not make the mistake of thinking that the management company's only task is helping with daily maintenance, or with keeping tenants happy. Even more foundationalbefore you get your first tenant, and indeed, before you even invest in the propertythere is site selection. In commercial real estate investment, site selection is everything. A professional management company can lend you the expertise you need to ensure that the site you select is the best one.
Location, Location, Location
Why is it that site selection is so crucial? You have surely heard the conventional wisdom that in real estate location is everything. Certainly, that is true when it comes to commercial real estate investmentsand you can probably understand why. Say you want to invest in a shopping center; ensuring that you choose a location that is visible, accessible, and that sees a lot of traffic is vital for your success.
Of course, when retail shopping is your game, you can maybe eyeball a location and tell how good it isbut it is not always that simple. Often, it is necessary to do a little research and select a location that is trending upward, not slowly diminishing in consumer appeal. This becomes even truer when you are looking at warehouse or office space; for these commercial real estate investments, you cannot simply take one look and determine whether or not the location is solid. Enlisting the services of a professional management company becomes essential, then.
There is still more to the site selection process. After all, before you sign on the dotted line and commit to an investment, you have to do more than select a site. You also have to agree on a price, and negotiate a deal with the current owner.
This is an instance in which real estate experience will obviously come in handy. The sticker price of a property may or may not be accurate; conducting thorough research and ascertaining the real-world value of the property will ensure that you are not paying too much, that you are not getting swindled. In other words, having a real estate pro (i.e., a property management company) in your corner can save you from a potentially disastrous deal.
There are still other concerns that come into play as you think about site selection. For instance, what if you are investing in a piece of land, and seeking to build on it; it is vital to ensure that you can obtain the zoning permits necessary to do whatever it is you want to do, whether that means building an apartment complex or a warehouse.
In other words: Site selection can make or break a real estate investment. A property management company, then, can help you avert bad decisions, and ensure investment success.