4 Common Misconceptions Hindering Your First Commercial Real Estate Investment

Are you toying with the idea of getting involved in the commercial real estate investment world? Have you been performing Google searches on commercial properties or commercial real estate investment ideas, only to find reasons not to move forward?

Placing a large sum of money into a commercial property may be daunting, but your friends at The Robert Weiler Company are here to debunk a few misconceptions you may have read. In a world where “fake news” is the buzzword of the day, here are four ideas that might be holding you back (when they don’t have to):

Misconception #1: Commercial real estate investing is as challenging as rocket science.

Learning how to invest in commercial real estate successfully is not an impossible feat, even for true beginners. There are so many resources available to assist you in wrapping your head around the ins and outs of commercial real estate investment. For example, there are convenient online and in-person classes, many books written for all levels, experienced advisors to assist you, and so much more.

Not sure where to start? If you are considering investing in a commercial real estate property in Columbus, Ohio, you can visit Columbus REALTORS® (columbusrealtors.com) or the Ohio Association of Realtors (ohiorealtors.org). If you seek more broad-based information on the industry, you may want to look at these 14 resources for commercial investors. Countless blogs, books, and podcasts are ripe with valuable information. And, don’t miss the opportunity to check out our CRE blog, chock full of tips and insight.

As with anything else in life, where there’s a will, there’s a way. Anyone who puts their mind to it can learn to become a successful investor. They just have to put in the work!

 

Misconception #2: Commercial real estate investment is a walk in the park.

Opposite of the first misconception, some people think that investing in commercial real estate is a super easy and surefire way to make money. You’ve likely watched the relevant television shows such as HGTV’s Fixer Upper, where investors pull off massive gains, and it’s all neatly wrapped into a 30- or 60-minute segment. How hard can it be, right?

Wrong! The risk can fluctuate significantly depending on the type of commercial investment property you choose. The type of commercial real estate property, the area you select, and the economy are all factors that can change your investment outlook. Even the top commercial real estate firms can have difficulty choosing lucrative properties! Furthermore, it may take you longer than anticipated to see a return on investment and achieve the profits you dream about. If you are thinking of jumping into investing, give it some serious thought first.

Recently, we wrote a blog post on the seven mistakes investors make when buying Ohio real estate. We encourage you to review it, mainly if you still believe that commercial real estate investment is simple.

 

Misconception #3: I need to have some serious cash to invest in commercial real estate.

It’s not true that you need to be wealthy to get into the commercial real estate investment game. There are other ways to snag properties, including obtaining loans from a bank (good credit does help here) and private money lenders. Also, there are ways (such as wholesaling) to avoid putting a lot of (or any) money down. Do your research, and you can find savvy workarounds if money is an issue.

Still hesitant? Take baby steps and start by investing a small amount of money with an expert commercial property investment group. Just make sure they’re reputable. It’s a low-risk opportunity to try out the industry, make essential connections, learn a thing or two along the way, and make profits that will help you invest individually in another property in the future.

Savvy commercial real estate investors also rely on a 1031 exchange for a tax break. A 1031 exchange will defer capital gains taxes when reinvesting the proceeds from one commercial property into another like-kind property. “1031 Exchange” refers to Section 1031 of the Internal Revenue Code (IRC). This tax break is also sometimes referred to as a like-kind exchange.

 

Misconception #4: I don’t have the time to concentrate on commercial real estate investing.

The beauty of investing in commercial real estate is that you can customize your choices based on your lifestyle. Different types of investments require varying levels of responsibility. But, even if you choose a high-responsibility option with commercial investment properties, there are workarounds. For instance, owning an apartment building will require a lot of work; however, you can hire a maintenance staff and a property management team to take care of everything for you.

Investing isn’t one-size-fits-all. It doesn’t matter how old you are, whether you have kids, if you have another job, or other responsibilities; your commercial real estate investment can be tailored to suit your needs.

 

Still not sure if investing is the right path? Call the commercial real estate mavens!

There is no doubt that commercial real estate investing can be exciting, yet overwhelming at times. Don’t feed your fears; read as much you can and check your resources. Do you still hold any misconceptions not addressed here? The experienced team at The Robert Weiler Company would love to help you and tell you whether there are any truths to them. What to know the hottest Ohio investment opportunities available now? Call us today at 614-221-4286 to discuss your potential commercial real estate investment.