You’d be hard-pressed to find anyone with even a scant amount of insight into the financial sector that would deny the merits of investing in commercial real estate, especially in Austin, Texas. But the options can seem limitless. Do you jump in with both feet and go it alone, or should you use a commercial real estate company? Benefits and pitfalls abound depending on your commitment level, but let’s examine a few reasons why Austin, Texas commercial real estate companies like Rastegar Property could be a perfect fit, even if you are just starting to dip your toe into the inviting waters of commercial real estate.
Let Real Estate Companies Do the Shopping
HGTV shows make it look so easy, don’t they? Just show up, take a look around, playfully debate with your general contractor on the merits of marble vs. quartz, then collect a massive check 30 days later.
If only real life were more like television. The unfortunate reality is a lot more complicated.
There are far fewer consumer protections in place for buying commercial real estate as there are for your average single-family home purchase. That means due diligence is on you and no one else. Taking the time to make sure the property is in a fit enough state to keep you in the black after the purchase could add another 60 days to the process. Tack on even more if you need to sort out zoning, permits, environmental investigations, and/or approvals. Paying an attorney for a commercial real estate transaction is not only recommended but critical to making sure you are taking ownership of a clean title and are able to properly evaluate any existing leases.
And we haven’t even talked money yet.
Considering what lenders look for when applying for a commercial real estate loan could make your head spin. Once you’ve sorted through over a dozen types of loans, LTV ratios, terms, and rates, it’s time to start digging through the back of your closet for 5 years of tax returns and financial records, preparing projected cash flow for the life of the loan, credit reports, state certifications, third-party appraisals, business plans and plenty more.
Especially in an area like Austin, Texas, where commercial real estate is booming and will only continue to grow, every listing is likely to get extremely competitive. Working with an experienced commercial real estate company, who knows the players and the field equally well, will also give you a leg up on the competition.
Work Doesn’t Stop After the Deal is Done
Gone are the days when a kindly old couple like Fred and Ethel Mertz could manage a New York City apartment building.
Owning a commercial real estate property means the work has only just begun once you have the keys in your hand. Managing a property with tenants is a fulltime job...if you’re lucky. This leaves an investor with two options: Manage the property on your own or pay a manager to do it for you. With a median annual salary that can be as much as $170,000 a year, that’s a significant portion of income gone before it ever hits your bank account.
Coupled with property taxes, annual operating expenses, reserves for major repairs and improvements, insurance, and more; time and money spent managing a commercial property can seem like a weight far too heavy to carry on your own.
An experienced real estate company that can also manage the property after the deal is done can alleviate that weight. Major fixes and figuring out how to collect rent fall on them.
Go After the Big Fish
Many of us dream about the opportunity to go after a big-money deal, although very few of us have the capital to make it happen. Working with a commercial real estate company could mean the opportunity to take part in projects you may never have a shot at on your own.
Commercial Real Estate Companies Simplify Complicated but Profitable Opportunities
Partnering with a commercial real estate company can not only help you find the best property to invest in but can also manage every aspect of it afterward. Fixes, improvements, and collecting rent are not your problem. It also allows the opportunity to participate in high-dollar deals that the average person can only dream of. No investment comes without risk, but using commercial real estate companies to mitigate that risk and maximize earning potential creates the perfect opportunity to start putting your money to work for you.