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Finding an Investment Property that Can Produce Big Profit

15 Jan 2016 · by Chad Graham

There are several goals that different investors may have in mind when shopping for commercial real estate in Anchorage. For example, some may want to flip the property with a quick renovation and a sale. Others may want to hold onto a property for long-term income generation. If you are looking for an income-producing property, there are a few important steps that you can take to make a better buying decision.

investment-property

Review Operating Statements Closely

When buying commercial real estate, it is ideal to ask for at least the last few years of income and expense statements, or operating statements of the property. This will include figures for property taxes, insurance, maintenance utilities and more. It also will include the income generation numbers.

Look for major fluctuations between the numbers from year to year, and ask questions about the reason for major fluctuations. In addition, consider that your own mortgage payment will need to be paid in addition to the operating expenses. This will therefore give you a great idea about your own cash flow when running the property on your own.

Think about the Future of the Property

It is also important to think about how your Anchorage, AK property may change in the future. For example, research plans for multifamily investments close to yours and changes to the infrastructure. If the town has a major employer, consider researching plans for that employer in the future as well as their strength as an economic base in the area.

There are many changes that could happen which could impact the economic viability of your investment. A commercial real estate purchase is a major one, and you want to do everything you can to ensure that the income will continue to be produced at the same level and that the desirability of the property will not be diminished.

When selecting real estate in the local area to purchase as an investment, you will have several wonderful choices to consider. If you feel that the market conditions are not ideal, you may want consider looking at another market or at a different property type. For example, an office building with long-term leases in place may be more desirable in some markets than an apartment building with short-term leases.

Sources:

Investment Property 101: How to Find, Hold, and Build Wealth in Real Estate, BiggerPockets

Chapter 5: How to Find Investment Properties, BiggerPockets

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