Timing: when and what to buy or sell
You have decided to invest in commercial property, you are financially prepared, and you want to make some moves. How can you make sure the timing is right, the market inventory is available and the desired profit potential projects favorably?
Good questions. One obvious first step is to connect with the right commercial realtor who lists the relevant products that interest you, and who has a good record of matching properties with buyers.
In order to serve you appropriately, that commercial realtor needs a clear understanding of your goals beyond acquisition. Knowing that vital information will help your realtor assess whether or not the time is right for the purchase(s) you seek.
How is the market trending? How do those trends compare with adjacent commercial market regions?
Should you narrow or widen your product preferences in consideration of what your chosen market presently offers?
Generally, when values are down it might be a good opportunity for longterm investment. If the market in question shows excellent future up-trending, and you do not need short-term liquidity, buying low is very smart. It is important to work with a commercial realtor with broader vision than just his or her immediate marketplace. Has your realtor researched commercial land and commercial structures values in adjacent counties and in the broader adjacent region? Ask!
When you are the seller in a market that is trending low for commercial property values, your challenges differ from the buyers who are trolling for low priced purchases and long-range future investment profits. As sellers you may be willing to sell for lower profits (while those profits are still reasonable), but you won’t want to miss your own opportunity to hold fast—if you can—while your market trend slowly climbs.
Getting the right guidance and advice in such scenarios is essential for wisely managing your investment dollars—whether you are buying or selling.
Your concerned commercial realtor will keep you informed of trends that affect the value of your listed properties. Many commercial property owners, as well as potential buyers, simply do not closely watch market trends, or may not know how to interpret their significance in relation to the greater regional trends. Knowledge of relevant community planning, zoning changes or variances and information concerning new and future commercial influx will influence their advice to clients.
Whether commercial market values are trending up or trending down, opportunities are there! It depends on where you stand and what your commercial property investment strategies are. Can you buy low and wait for returns down the line? Can you hold onto lower value property and wait for value improvement before you list to sell? These and many other questions and possibilities can be productively discussed with your professional realtor—to your better advantage.
I invite you to send me questions you may have about commercial real estate—buying, selling and other aspects of investing.
Location is a critical consideration when you are making commercial real estate decisions. In next month’s column I will be discussing the importance and impacts of location, location, location!