Commercial real estate remains one of the most lucrative investment vehicles for most people. However, you need to seize every advantage to ensure that you get a high return on your investment as an investor.
As an investor in the commercial real estate, you need a 1031 qualified intermediary on speed dial. Such experts are instrumental in helping you take full advantage of the 1031 property exchange program. Under this provision, the government lets defer capital gains taxes when selling commercial property.
The process enables you to buy a replacement property that commands a higher rental income. Here are some additional steps to help you keep the income high and consistent.
Define your target market
Wildly successful businesses go to great lengths to forge strong bonds with their target market. Grow your chances of success by borrowing a leaf from their playbook. See, like any other business, commercial real estate is a numbers game.
You need to keep the occupancy levels high all through the year and reduce tenant’s turnover. Every time the property remains vacant equals to a loss and such, strive to keep the property fully occupied. Having people on a waiting list is instrumental in keeping the occupancy levels high.
In-depth knowledge of the target market -their needs, preferences, and pain points – puts you a mile ahead of the competition. It’s vital that you provide your tenants with the kind of living atmosphere that they crave. Once you do that, they will stick you for a long time.
Embrace modern technology
In the face of skyrocketing cost of living, the last thing that people need are expensive bills. Providing your tenants with a way to lower their utility bills can help win them over and prompt them to stick with you. Luckily, you can count on modern technology to help you out.
Just be sure every new acquisition comes jam-packed with green technology. That could range from water efficient showers, toilet cisterns, low flow tap, daylighting technology, and energy efficient lighting and heating system. While the asking prices for such property can be a mite higher, they are worth every penny.
People are only too happy to occupy a building that enables them to lead a modern life without paying through the nose for convenience. They will appreciate saving a few hundred dollars in heating and water bills every month.
Such perks are a proven way to draw high caliber tenants and entice them to stick with you for a long time.
Keep up with current affairs
In what seems like a contagious wave, more than 33 states have legalized the use of marijuana for medical or recreational use. To many people who don’t appreciate the drug, that might seem something worth ignoring, except you shouldn’t.
See, medical marijuana is proving to be a hit with many people, and this popularity is spilling over to real estate. While the numbers are not alarming, people are actively relocating to states where marijuana use is now legal. And the real estate market is reacting to the increased demand for houses.
The springing up of grow houses and dispensaries has a considerable effect on the local real estate market.
Some areas are reporting a spiking demand for houses, which effects a price hike in most location. There’s also a growing demand for commercial space for dispensaries and other marijuana-related businesses.