Investing can be a very wise way to make your money work for you and create passive income for yourself every month. When looking specifically at investing in a commercial investment property, there are 5 things to look for to maximize your return and ensure a smooth transaction.

1. Find a broker you can trust

Finding a real estate broker, you can trust is no easy task, but it is essential to ensuring you find a commercial investment property that is the right one for you. The broker is the person handling most if not all the industry research, the property search, showings, and they will represent you in the purchase negotiation. At Landmark Title, we work with real estate brokers, investors, attorneys, and their clients purchasing commercial investment property in the Arizona and Nevada markets. 

2. Do your research

There are several types of commercial properties including office, retail, and industrial. To decide which you’d like to invest in, do research to gain a greater understanding of the different sectors. Learn what the potential investment cost might be, what your requirements are as a commercial property owner, and assess the potential long-term value and possible return on investment.

In addition to doing your own research, be sure to lean on your real estate broker to guide you through the process, run market research reports and conduct property searches to ensure you find the best options for investing.

3. Factor in market dynamics

The dynamics of the market you are investing in are an important consideration. Although investing in commercial real estate can be very lucrative, the industry is not immune to the ups and downs of the economy. Before investing, make sure the various factors make sense; timing, location, market sector and pricing key details that need to be considered to ensure your potential return in the long term.

Pro Tip: Make sure the leases for your tenants include yearly rental increases to offset inflation year-over-year.

4. Ensure good tenancy

Speaking of tenants, ensuring good tenancy is in your best interest as a property owner. A sure way to establish trust in your tenant is to ask for their financials. By doing so, it requires transparency on their end and demonstrates that they have the means to fulfill the lease requirements. It also reassures an owner that the tenant can hold up their end of the deal for the long term and protects against ups and downs in their business.

5. Accurate documentation

You’ve heard the saying “read the fine print.” In the case of commercial real estate investments, when there is a lot of money involved you are best to enlist legal counsel to ensure proper and accurate documentation from all parties involved. Landmark Title works closely with attorneys and understands the complexities of a commercial transaction and the importance of the documentation process.

Landmark Title has an experienced team of professionals with expertise in the escrow and title process for commercial real estate transactions. If you are a broker, investor or developer looking to make a commercial real estate purchase, contact us today to speak with one of our team members about how we can help.