Some of the most successful business tycoons made their millions by investing in real estate. Unlike other kinds of investing, though, you cannot take a passive approach to real estate.
U.S. News reminds readers that even if they hire a property management company, commercial buildings still require a lot of hands-on work, and you will get the best return when you do most of it yourself. If you have already considered the risks and have decided that you are ready to invest, it is a good idea to protect your finances by enlisting the help of a real estate attorney.
A Long Island commercial real estate lawyer from Solomon Richman P.C. can answer your questions about purchase agreements and other legal matters. Call 516-437-6443 today to schedule a free initial consultation.
Read on to learn four factors you should consider before investing in real estate:
- Your Current Financial State
In general, you should use any extra income to pay off high-interest debt before you put it toward investing. According to Forbes, you should not invest in real estate until you are fairly financially comfortable. Being financially comfortable means something different to everyone, but in general, you should not have an overwhelming amount of debt, you should already have a steady income, and you should have a liquid emergency fund that is readily accessible before investing in real estate.
- Estimated ROI
Make sure you take into account all costs when estimating your potential return on investment. These include your down payment, estimated property taxes, your mortgage payment, and basic maintenance costs.
You should also explore the worst-case scenario; will you be able to manage if some of your units sit empty for an extended period of time?
- Your Long-Term Goals
Why are you interested in investing in commercial real estate, and what are your long-term goals? Investing in real estate is risky, and you should not enter the marketplace if you are only doing so to make fast cash. A lot of work goes into buying, selling, and managing properties, so make sure your long-term goals align with your investment plan.
- Your Team
Are you planning on working with business partners or going it alone? If you are starting off on your own, do you have access to qualified professionals who can help you avoid the many pitfalls of investing in real estate?
In addition to an experienced commercial real estate lawyer, you will also need a reliable real estate agent on your team. You should find a mentor who has been in the business for years, too, so you have someone who can guide you every step of the way.
If you want to enter the world of commercial real estate, turn to Solomon Richman P.C. for comprehensive legal guidance. Call 516-437-6443 to schedule a free initial consultation with a real estate attorney in Long Island.