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Revealed: 6 Commercial Property Investment Mistakes to Avoid

There’s no denying that commercial property offers investors a fantastic opportunity to grow their money. And when financial resources get pooled with other investors, it can provide almost limitless investment potential.

The trouble is, many commercial property investors make common mistakes – many of which result in them losing substantial sums of money. If you’re going to invest in commercial properties like offices, make sure you avoid making the following mistakes:

1. Inadequate Preparation

Investing in a commercial property isn’t a decision you should take lightly. That’s why it makes sense to do plenty of research and preparation before making any offers and concluding purchases.

But, what type of preparation work should you be conducting? Firstly, it makes sense to research land value, average rental yields, and demand for commercial property in your chosen area. It’s something you must do whether your investments are short or long-term.

2. Poor Budget Management

It doesn’t matter whether you use your money or capital provided by lenders or other investors. You must be strict about your budget and do everything necessary to avoid going over it.

For example, you should have a ceiling limit of how much you’re happy to spend on acquiring a commercial property. You must also have a fixed limit of what you can spend on any necessary renovations.

3. Failing to Scrutinize Service Providers

Whenever you purchase commercial property, you must conduct due diligence on any service providers you use. Anyone from a real estate developer to an electrician should provide you with peace of mind and guaranteed assurances about their work.

You don’t want to use fraudulent service providers, ones that have a bad reputation, or charge higher than reasonable prices.

4. Investing in the Wrong Property

Let’s face it: there’s always an element of risk when you’re investing in commercial property. The trick to mitigating risks is by conducting thorough market and property research. Doing so, for instance, means you can avoid buying a building that isn’t fit for purpose.

You should also have a firm idea in mind of the types of commercial property investments you want.

5. Forgetting About the Neighbors

You may have some ideas in mind of what you’d like to do with a commercial property. For example, you may wish to convert a building into a series of boutique retail units. Getting the right government approval is one thing, but are you considering the views of your neighbors?

Irrespective of how ambitious your plans are, you should always consider your neighbors’ views. Doing so will save you from a lot of headaches in the advanced stages of your development plans.

6. Inaccurate Repair Assessments

Virtually any commercial property you buy will need some repairs or upgrade work. It’s crucial you thoroughly assess what work needs to get carried out. When you do so, you’ll avoid going over your repair budget and potentially making a huge loss on your investment.

Ensure you get ‘second opinions’ on any repair assessments so you can make informed decisions about all repairs.


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About the Author

Kaya Wittenburg

Blog Author and CEO

Kaya Wittenburg is the Founder and CEO of Sky Five Properties. Since the age of 10, real estate has been deeply ingrained into his thoughts. With world-class negotiation and deal-making skills, he brings a highly impactful presence into every transaction that he touches.

He is here to help you use real estate as a vehicle to develop your own personal empire and feel deeply satisfied along the way. If you have an interest in buying, selling or renting property in South Florida, contact Kaya today.

Feel free to call me at: (305) 357-0635
or contact via email: