If one has sufficient capital and capable entrepreneurship, investment property in Anchorage, AK can be a wise business decision. The issue at hand, however, is choosing between residential real estate and commercial real estate to ensure the greatest possible returns. Tony Guerra of Homeguides.SFGate.com offered a brief insight into the inner workings of investing in commercial properties:
In commercial real estate, you generally buy likely revenue-generating properties and make money off tenants’ long-term leases. Commercial real estate investing, though, typically involves much higher start-up costs than residential real estate investing because commercial properties are pricier. Also, you usually need deep-pocketed investor-backers or lenders in commercial real estate investing. Banks can be difficult when giving commercial property loans. However, commercial properties, if bought and managed or sold smartly, can generate significant revenue or sale profits.
Investors can get a boost from a well-experienced team of commercial property consultants like Graham Commercial Real Estate and ensure that all aspects of the purchase are covered. Still, for investors to maximize their profits, they should be willing to do their fair share of the work. Here are some suggestions to help them out:
Screen tenants thoroughly.
Commercial properties in Anchorage are in great demand. Still, instead of instantly welcoming the first batch of tenants who come through the door, property owners would benefit from screening the candidates and keep an eye out for red flags like bad rental histories. Tenants with outstanding rental histories represent a continuous flow of income for landlords.
Encourage long-term leases.
Some tenants prefer short-term leases because it gives them flexibility in case their space requirements change and they will have to move to another location—a favorable scenario for the tenants, but not the landlords. As such, property owners can work to push long-term lease agreements instead of short-term residencies since the former ensures a stable flow of income for the entire duration of the lease.
Ensure property is managed well.
Property maintenance efforts don’t only keep current tenants happy, but such intervention also ensures that the structure remains in good condition. A well-maintained Anchorage commercial real estate property will command a good market value if the owner decides it’s time to sell. Making property improvements as necessary can also help in this aspect.
Commercial property investment can deliver substantial returns, but investors should do their share of the work to make sure that it happens. If they are overwhelmed with the tasks related to their investment, though, they can look into getting assistance from real estate consultants who know the business inside and out.
(Source: Commercial Vs. Residential Real Estate Investing, Homeguides.SFGate.com)