There are approximately 300,000 people living in Anchorage, Alaska, and many of these people are out looking for houses or apartments to rent, or those who are starting a business are likewise on the lookout for a physical space to establish their enterprise in. This makes investing in real estate a very viable option—and when it comes to the value of the potential gains, few other ventures come close to Anchorage commercial real estate investments.
Many people choose commercial investments rather than residential for the better cash flow option that the former presents—this is because the income that commercial real estate produces is directly related to the useable square footage of the property, and the yield is actually higher on an initial investment basis compared to residential properties.
Getting into Planning
You should have a well-crafted plan of action before you even think about looking for a commercial property as your starting investment. Understand your finances and know just how much you can afford to pay and how much you expect your yield should be. You should also learn to find a good deal (many say that a great deal is one that doesn’t present a lot of risks and could still provide you with ample returns).
Choose a Space
Danielle Babb, Ph.D., talks about doing some research on a prospective property to invest in, in her article for Entrepreneur.com:
“As with any investment, it pays to do your homework. Find out what the vacancy rates were with the previous owners. Talk to storefront managers and find out what they like–and don’t–about doing business there.
Are they planning to renew their leases? What did they like about former management? Is business booming? Are any residential properties being built in the area? Is the site properly zoned? Are companies like Lowe’s and Home Depot moving in–a sign that there may be more demand for storefronts in the area? Is the population’s median income at least at the national average, and are people maintaining their income levels? How are the current store owners doing financially? Have they been behind on rent before? Be sure to ask to see the sellers’ cash flow statements, too.”
If you want your venture’s yield to improve further, you might also want to invest in a reliable property manager that serves businesses in Alaska. Efficient property management for Anchorage commercial real estate property also helps ensure that your property endures and the payment from tenants are always on time.
(Source: Investing in Commercial Real Estate, Entrepreneur.com)