Commercial real estate, also referred to as CRE, has recently become a more popular choice among real estate investors thanks to its growth potential and ability to provide passive income. If you are considering investing in CRE in Boca Raton, Florida, there are certain things you should know before you begin your career as a real estate investor.
Different types of commercial real estate
While residential real estate is a pretty cut and dried proposition, commercial real estate has many more possibilities. Multifamily, special purpose, industrial and office spaces are all types of commercial real estate. Each carries with it its own list of pros and cons, so you should do your homework on all your options.
Study your market
If you live in an area with very few families looking to rent an apartment, you probably shouldn’t invest in a multifamily apartment building. Knowing what type of properties are profitable in your target market can be the difference between success and failure as a real estate investor.
Study your property
Once you select the property in which you want to invest, you should take advantage of what investors call a “period of due diligence.” During this part of the process, you will need to carefully review financial statements pertaining to the subject property, conduct a feasibility survey and perform any other research needed to protect your investment.
All real estate transactions constitute both business and legal proceedings. If you are going to dive into the world of commercial real estate investing, you should also invest in an attorney who knows the laws that govern real estate in your state. A lawyer can help you gather information about a subject property and ensure that you are operating within the framework of the law as an investor.